Eli Lilly and Co. v. Genentech, Inc.

17 U.S.P.Q.2d 1531 (1990)

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Eli Lilly and Co. v. Genentech, Inc.

United States District Court for the Southern District of Indiana
17 U.S.P.Q.2d 1531 (1990)

  • Written by Tammy Boggs, JD

Facts

Genentech, Inc. (plaintiff) possessed genetically engineered biological microorganisms (biological material) that were protected by patent rights. Eli Lilly and Co. (Eli Lilly) (defendant) was experienced in producing human insulin from animals. Genentech entered into a license agreement with Eli Lilly, under which Genentech allowed Eli Lilly to use the biological material without regard to Genentech’s patent rights for the limited purpose of developing and selling synthetically produced human insulin. In exchange, Eli Lilly agreed to pay royalties to Genentech. Subsequently, Genentech believed that Eli Lilly had used the biological material referenced in the license agreement to develop a human growth hormone (hGH) that competed with Genentech’s hGH product, allegedly exceeding the license’s use limitation. Genentech sued Eli Lilly for breach of contract. The parties disputed their respective intentions in entering into the license agreement. While discovery was still underway, Genentech moved for partial summary judgment. Genentech argued that the license agreement’s use limitation included a covenant by implication barring Eli Lilly from using the biological material for non-insulin purposes.

Rule of Law

Issue

Holding and Reasoning (Dillin, J.)

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