Biogen Inc. and Genentech Inc. are heading to trial in June over a significant contract dispute concerning patent royalties on multiple sclerosis (MS) drug sales. A federal judge in California recently denied Biogen's motion for summary judgment, signaling that the case will proceed to trial. The lawsuit, originally filed by Genentech in February 2023, centers around a breach of contract regarding the royalties owed by Biogen for the MS drug, Tysabri.

U.S. District Judge Yvonne Gonzalez Rogers made her ruling at the conclusion of a hearing in Oakland, California, during which Biogen had sought to have the case dismissed. Genentech claims that Biogen failed to honor a 2004 licensing agreement by ceasing royalty payments for the immunosuppressive drug Tysabri, which treats both multiple sclerosis and Crohn's disease.

Under the agreement, Biogen was permitted to use Genentech's patented technology related to antibody manufacturing in exchange for royalty payments based on the drug's sales. Biogen had been paying Genentech substantial quarterly royalties for years but stopped in March 2019, arguing that no further payments were due after the expiration of the patent family on December 18, 2018.

The dispute revolves around "tail royalties," or whether Biogen is required to pay royalties for sales of products made before the patent's expiration but sold afterward. Biogen argues that the contract's plain language exempts them from paying these royalties, while Genentech asserts that the agreement obligates Biogen to continue payments under certain conditions.

Judge Gonzalez Rogers found that there was a material dispute over the language of the contract, ruling that Genentech’s interpretation might be correct. She emphasized that this interpretation warrants a trial, as the issue at hand is central to the dispute over patent royalties.

A three-day jury trial has been scheduled to begin on June 29, 2025, with jury selection set for that morning. The trial is expected to focus on the narrow issue of contract interpretation, and Judge Gonzalez Rogers has urged both parties to prepare for the trial without waiting for a further ruling on the motion for summary judgment.

Although the amount of damages is not explicitly outlined in the lawsuit, Genentech’s legal counsel indicated that they might reach an agreement with Biogen on the damages amount to avoid lengthy testimony from expert witnesses.

This case is not the only legal battle between the two companies. In 2023, Hoffmann-La Roche Inc. resolved a patent dispute with Biogen regarding a similar infringement claim involving Roche’s rheumatoid arthritis drug Actemra.