Wisconsin Wins a Battle Over Cholesterol Compounds

Chalk up another patent victory for the University of Wisconsin, Madison. Its hard-hitting intellectual property adjunct—the Wisconsin Alumni Research Foundation (WARF)—appears to have clobbered a biotech partner, Xenon Pharmaceuticals Inc. of Burnaby, Canada, that it says tried to exploit a discovery from Wisconsin’s biochem labs without paying the university some disputed fees.

Researchers at Wisconsin and Xenon collaborated 9 years ago to study an enzyme, stearoyl-CoA desaturase (SCD), whose cholesterol-lowering properties they both patented. Xenon helped finance this research. But a federal appeals court ruled yesterday that Xenon improperly tried to cut its own licensing deal with Novartis, excluding WARF, to create SCD-based drugs. The Seventh Circuit Court of Appeals backed a lower court that ruled several years ago that Xenon violated a partnership agreement by failing to share income from the Novartis “sublicense” deal. And the appeals court went even further than the lower court.

It said that, after learning of the Novartis deal from a press release, WARF was entitled to terminate the agreement itself and claim ownership of some discoveries that came out of the project. Specifically, the decision says that Wisconsin has property rights in potential drug compounds studied by a university biochemist, Mark Gray-Keller, who was hired by Xenon on a consulting agreement to test the activity of materials the company wanted him to check out.

Xenon declined to comment. Calling the decision a “clean sweep” last night, WARF’s general counsel Michael Falk, released a statement saying: “We are extremely pleased with this ruling. WARF now stands free and clear to move the technology forward commercially and intends to do so.”