Chiron Corp.'s patent claims for its hepatitis C virus test arevalid but not currently enforceable in the United Kingdom,according to a U.K. patents court ruling on an infringement suitfiled by Chiron and Ortho Diagnostic Systems against MurexDiagnostics Ltd., Organon Teknika Ltd. and United BiomedicalInc.

The ruling, issued Tuesday, found that the hepatitis C viralantibody detection products marketed by the defendantsinfringe on Chiron's (NASDAQ:CHIR) patent. However, JudgeAldous ruled that since a provision in Chiron's licensingagreement with Ortho is invalid under British law, these HCVtests may remain on the market. The suit was heard in thePatents Court of the High Court of Justice, Chancery Division.

Under the joint business agreement between Chiron and Ortho,Chiron has the right of first refusal to supply Ortho with anydiagnostic antigens, including antigens for which Chiron doesnot hold a patent. Chiron of Emeryville, Calif., said it is studyingthe option to revise its agreement with Ortho.

Chiron also said the British statutes prohibiting certainrestricted supply arrangements in patent licenses "are uniqueto the U.K., and thus the current licensing arrangementsbetween Chiron and Ortho will have no effect on theenforcement of Chiron's HCV patents in other countries."

Chiron's vice president and chief patent counsel, Bob Blackburn,said the U.K. ruling "sends a message to competitors that wehave an unassailable patent." He said the U.K. is the "toughestplace to test patent validity," as patentees traditionally do notdo well there.

Murex's vice chairman and chief executive officer, RobertCusick, told BioWorld that the company intends to appeal theruling. Murex (ASE:MXX) of Norcross, Ga., had disputed thebroadness of Chiron's patent claims and argued that the HCVinvention was obvious, did not involve a new invention andtherefore should not have been patented. Cusick said the judgeindicated that there was room to appeal the broadness claim,adding that the appeal will not be heard until the middle of1995.

Chiron said its patent covers, among other things, "antigenicHCV polypeptides (including structural and non-structural),regardless of method of production (recombinant, synthetic,etc.); HCV antibodies; the use of such polypeptides andantibodies in immunoassays; HCV polynucleotides and the useof such polynucleotides in recombinant protein expression, DNAprobe tests and PCR (polymerase chain reaction) tests."

Cusick said Murex has a patent pending for the NS5 protein,which is found in hepatitis and used in its HCV test. He saidChiron's patent, if enforceable, would cover this protein and awhole array of other proteins.

The court ruled that the patent does not cover claims for HCVvaccines and tissue culture.

Chiron and Ortho developed a microplate test to detect thepresence of HCV antibodies and began marketing it in Japanand Germany in 1989 and in the U.S. and other Europeancountries in 1990. Chiron was issued a U.K. patent for the testin 1992; a patent is pending in the U.S.

Murex began marketing its test in 39 countries in 1992. On Jan.22, 1992, the day Chiron's patent was issued in the U.K., Chironand Ortho filed suit against Organon Teknika Ltd., a subsidiaryof the Dutch company Akzo N.V. and other Akzo subsidiaries.United Biomedical Inc. was later named a defendant in the suit.Chiron and Ortho brought a second suit against Murex in March1992, and the two cases were consolidated for the trial.

The HCV test is currently Chiron's biggest product. Overall 1992worldwide sales of HCV tests by all companies wereapproximately $400 million. Chiron and Abbott Laboratoriesare the sole marketers of HCV tests in the U.S. Abbott licensedthe HCV patent from Chiron and Ortho to sell an HCV test in itsproprietary bead format.

Chiron's stock gained 75 cents a share on Tuesday, closing at$78.50, while Murex's stock was down 13 cents a share to$6.25.

-- Brenda Sandburg News Editor

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