CAT vs MorphoSys patent litigation: a broker's view

In the US trial on whether Germany's MorphoSys infringes UK companyCambridge Antibody Technology's intellectual property covering the use of phage display technology to generate therapeutic antibodies, analysts at Morgan Stanley Dean Witter believe the former has more to gain in the dispute than CAT.

CAT has exclusive access to three core patents (referred to as Winter II, McCafferty and Griffiths), which cover different aspects of its antibody phage display technology. This trial will determine whether MorphoSys infringes the first of these, US 5,885,793, to be issued in the USA. MSDW notes that this is the only patent involved in this lawsuit, but is the first in a series of cases to determine whether the German firm has freedom to operate. In March 1999, MorphoSys filed a motion with the District Court of Washington DC seeking a declaratory judgement stating that it does not infringe the Griffiths patent, and sought to have the patent declared invalid.

The analysts point out that CAT does not use or require access to any of MorphoSys' proprietary technology, and so this dispute cannot be resolved by a simple cross-licensing agreement. Moreover, irrespective of the outcome of any of the legal actions, CAT will maintain its freedom to operate.