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May 4, 2006
Ariad Wins a Round
Well, you'll no doubt have heard that Ariad won its case against Eli Lilly today. The jury found that Ariad's patent was valid, that Lilly had infringed it, and that Ariad was owed royalties, retroactively and in the future. This isn't the sort of case (or the sort of universe) where the jurors would get interviewed by Larry King and Oprah, but I would very much like to know what this jury knew, or believed that they knew, about intellectual property and cell biology. Ah well, at times like this, my wife reminds me that I thought that O.J. Simpson would be convicted, too.
I'll not rant; my position on this has been as clear as I can make it for some time. I hope that Ariad and its shareholders enjoy their victory while they can. Said shareholders should realize, though, that it's very unlikely that one dime will be coming to the company until several other legal proceedings finish up. First off, Lilly will appeal this verdict. Then there's the reexamination of Ariad's patent that Lilly requested. And there's another Lilly trial - a bench trial this time, no jury - on whether Ariad's patent is enforceable. And let's not forget Amgen's recently filed suit in Delaware.
I find it very unlikely that all of these will go Ariad's way, since at least three of them will be judged by people who know what they're talking about. In the meantime, I haven't covered the short position I spoke about the other day, even though I'm about $1500 to the bad right now. The stock didn't take off like a skyrocket today, and I think that the legal uncertainty around today's verdict will keep it from doing so over the next few months. I have time and collateral. Who knows, as things go on I might short some more, and I'll post it if I do. Court of Appeals for the Federal Circuit, over to you.
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