Technology & Science
Jun. 26, 2002
Hospital Gets $200 Million in Punitive Award
LOS ANGELES - A Los Angeles jury Monday ordered Genentech Inc. to pay $200 million in punitive damages to the City of Hope - far less than the research center had sought for Genentech's failure to pay royalties on drugs that helped spark the biotech revolution.
Nevertheless, City of Hope counsel Glenn Krinsky said that the center is "thrilled" with the verdict and that the money - including more than $300.2 million in compensatory damages - will be put to good use.
"We felt all along this was a case that would be won in a trial," Krinsky said.
The dispute between City of Hope and Genentech hinged on a 1976 contract that described the terms under which the center would be paid for the technology its scientists developed.
The patents developed by City of Hope scientists Dr. Arthur Riggs and Dr. Keiichi Itakura helped lead to the production of valuable drugs, including human insulin and human growth hormone.
On June 10, the jury awarded $300.2 million in compensatory damages to City of Hope.
The jury voted 9-3 that Genentech breached its contract and 10-2 that it breached its fiduciary duty with malice or fraud by failing to pay the royalties on scientific patents created by the center. City of Hope National Medical Center v. Genentech Inc. BC215152 (L.A. Super. Ct., filed Aug. 13, 1999).
Outside the courtroom Monday at the Central Civil West Courthouse, jury foreman Herman Askew said many of the jurors didn't believe some of Genentech's witnesses, including former executives who were questioned about particular documents.
Those witnesses, Askew said, "hurt Genentech a lot" because they answered questions about the contract with "I don't know."
"Either you're hiding something or you're lying about something," Askew said.
But City of Hope partially was to blame for the loss of money, he said.
"City of Hope had a lot of responsibility to take care of their business, instead of relying on someone else to take care of business," Askew said.
With that in mind, the jury was unable to award $500 million in punitive damages alone, as the research center had sought, he said.
Juror Vatche Manoukian said the punitive damages the panel awarded was the amount of interest on the $300 million in losses City of Hope suffered.
Manoukian said the dissenting jurors felt Genentech interpreted the contract the "right way."
Genentech's vice-president of intellectual property, Sean Johnston, said the company plans to appeal. First, attorneys will ask Judge Edward Y. Kakita to grant a motion for a new trial.
Krinsky said there are no current talks of a settlement with Genentech, and any action by the corporation to appeal the verdict would be "fruitless," he said.
Leslie Simmons
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