updated 9/18/2006 7:14:50 PM ET 2006-09-18T23:14:50

In a blow to ImClone Systems Inc., a federal judge ruled Monday that three scientists from Israel are the true inventors of a patent used for the company's blockbuster cancer drug Erbitux rather than seven people whose names are now on it.

U.S. District Judge Naomi Reice Buchwald made the finding in a 140-page opinion that said lawyers for the scientists had proved they were entitled to sole inventorship of the patent.

Lawyers had predicted that the case could have significant effects on the future of Erbitux, a colon-cancer treatment drug made by ImClone, the company whose founder, Sam Waksal, is serving a prison sentence for his role in the stock scandal that also ensnared Martha Stewart.

In a 2003 lawsuit, Yeda Research and Development Co. of Israel sued ImClone, which has an exclusive license for the formula used in Erbitux to inhibit tumor cells, and its partner Aventis, claiming three of its researchers were the real inventors.

During hearings this summer, plaintiffs' lawyer Nicholas Groombridge said ImClone could lose its exclusivity with the technique covered by the license if Yeda's scientists were credited. He said a ruling such as the judge's on Monday would free Yeda to license the patent to other drug companies. He said if all the names currently on the patent were taken off, ImClone would not have a license anymore.

"I presume there would be a negotiation and a deal would be reached," he said then. "It is not the intent of Yeda to keep anybody off the market."

A lawyer for Aventis later noted that one trial witness had remarked that hundreds of millions of dollars were at stake for Yeda and Erbitux, which is distributed in the U.S. by Bristol-Myers Squibb Co.

Lawyers for both sides didn't immediately return telephone calls seeking comment after the ruling.

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