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Biotech / Medical : VD's Model Portfolio & Discussion Thread -- Ignore unavailable to you. Want to Upgrade?

To: John Zwiener who wrote (8168)	8/25/2000 12:04:48 PM
From: John Zwiener	Respond to of 9719

From the court house, Igen versus Roche. An example of how some large companies treat their little "partners". Suzman, how about 3 more smoking guns from Roche. Posted by lawfighter on Yahoo, who went to the court house and copied the documents. 1)Also attached to the Amended Complaint is a Roche internal memo of 9/16/93 entitled, "Summary of the Meeting to Discuss Establishment of Accounting systems Allowing Minimisation of Royalty Payments to IGEN on September 14, 1993." The memo then details ways to hide information and confuse the accounting process so as to reduce the royalties payable to IGEN. (Apparently, there was an earlier meeting on February 25, 1993 in which the same plan was discussed.) The Amended Complaint then alleges: 77. "This program laid the groundwork for a system whereby Roche would deduct many categories of ECL-related products [from] its Elecsys revenues before calculating the royalty due. Indeed, the memorandum contemplated the deduction of certain costs that Roche could not even determine accurately." (The Amended Complaint then refers to the document that I posted yesterday regarding driving down IGEN's share price.) It continues: 79. "IGEN simply should not be forced to remain in any licensing arrangement -- let alone an exclusive licensing arrangement -- with a party that persistently breaches the Agreement in an effort to drive the Company out of business." messages.yahoo.com. 2)Under the business Agreement, BM/Roche had the right to grant sublicenses to its Affiliates. However, those Affiliates were to be subject to all of the restrictions and covenants of the Agreement that protected IGEN, and BM was to "ensure full compliance therewith by such Affiliate Sublicensees. BM shall once a year inform IGEN of all sublicenses with Affiliate Sublicenses." Take your best guess - do you think they did so? Hell no. In some cases, they never even told Affiliates about the restrictions in the Agreement. In another exhibit to the Complaint, Peter Homberg, in house counsel for Roche, stated: "The relationship between Roche and our affiliates . . . around the world is fairly unstructured and based largely upon persuasion, rather than direct control authority. . . Each affiliate has its own independent management . . . and is responsible for its own marketing and business plans . . . operating performance, including its profit/loss statement. Roche does not have supply and distribution agreements with its affiliates. . . Rather, each affiliate is presumed and allowed to operate as its own interests dictate." The Complaint then alleges that Roche's transfer of IGEN's technology to Affiliates that Roche is unable to control, and its failure to inform, police and ensure compliance, has caused IGEN substantial damages and the Agreement should be terminated on that ground as well. messages.yahoo.com. 3)In 1991, Roche conducted a patent search before making the deal with IGEN. Its purpose was to determine if IGEN's electrochemiluminescence (ECL) technology stepped on any one else's property rights. A company called Serono then held a patent on related technology known as the '610 patent. Roche unequivocally took the position that the licensed ECL technology did not infringe the '610 patent. It maintained that position for seven years. In 1998, Serono filed a patent infringement action in Delaware federal court against IGEN and its licensees Roche and Organon Teknika. In the Serono suit, Roche again took the position that the ECL technology did not infringe and that the '610 patent was invalid. What do think happened next? In September 1998, Roche surreptitiously commenced "confidential settlement discussions with Serono. Our friend Peter Homberg was the principal negotiator for Roche. On July 12, 1999, these discussion culminated in the execution of a patent purchase agreement between Roche and Serono in which Roche bought the patent thereby resolving Serono's allegations that the licensed ECL technology infringed the '610 patent. Sounds okay, right? Read on. "142. Although the Roche companies originally contemplated obtaining from Serono dismissals with prejudice on behalf of Roche and IGEN, Roche ultimately chose not to require Serono to dismiss Roche and IGEN as a condition of settlement. Rather they caused Serono to dismiss the Roche defendants only and to substitute Roche as a plaintiff, so that Roche could continue to pursue the action against IGEN. Since the settlement, Roche has aggressively prosecuted the action against Igen. 143. Roche's crafty maneuvering in the Serono action was designed to put pressure on IGEN to dismiss or settle this suit. It not only violates Section 13.1 of the Agreement, it also constitutes unabashed bad faith and unfair competition." There is plenty more but it's late and I need to go home. Let me just say that this reminds me of a time many years ago when I put on a spring suit that I hadn't worn in months. When I put my hand in the side pocket, I found a $50 bill that I didn't even know I had lost. I walked around with a smile on my face all day. You oughta see my grin right now! Have a nice evening. messages.yahoo.com.