U.S. Court of Appeals Issues Ruling on “McCormick” Patents Litigation

Litigation Complete, Biogen to Make $55 Million Payment

Biogen, Inc. (NASDAQ/BGEN) said today that a decision on January 31, 2003 by the Court of Appeals for the Federal Circuit ends long-standing litigation with Berlex Laboratories over a claim that the manufacture of AVONEX® (Interferon beta-1a) infringes Berlex’s “McCormick” patents. In accordance with a January 2002 settlement between the two companies, Biogen will make a final $55 million payment to Berlex.

The court ruled in Biogen’s favor on patent claim construction and decided there was no literal infringement of Berlex patents by AVONEX. However, in view of the US Supreme Court’s recent Festo decision changing patent law on the doctrine of equivalents, the court remanded the case to the district court to determine if one of the patents might be infringed under the Supreme Court’s redefinition of the doctrine of equivalents. The previously negotiated contingent settlement eliminates any need to litigate these remaining issues and finally resolves the entire dispute.

The January 2002 settlement between the two companies provided for Biogen to receive a fully paid up, royalty-free, non-exclusive license under patents held by Berlex in return for a payment to Berlex of $20 million. As part of the settlement, the companies agreed that a second and final payment from Biogen to Berlex would be due if the Court of Appeals were to reverse a prior U.S. District Court ruling granting summary judgment in favor of Biogen. In this scenario, Biogen would make a second and final payment of $55 million to Berlex. In the event that the Court of Appeals had rendered a significantly adverse ruling against Biogen, the final payment would have been $230 million. As part of the settlement, in all instances the companies agreed not to pursue further litigation about the McCormick patents.

The $55 million cash payment will be made immediately. We will issue a subsequent press release regarding the accounting treatment of this payment after we have reviewed it with our external auditors.

About Biogen
Biogen is the world’s oldest independent biotechnology company and a leader in biologics research, development, and manufacturing. A pioneer in leading edge research in immunology, neurobiology, and oncology, Biogen brings novel therapies to improve patients’ lives around the world through its global marketing capabilities. For press releases and additional information about the company, please visit http://www.biogen.com.

Media Contact:
Tim Hunt
Director, Public Affairs
Biogen, Inc.
(617) 914-6524

Investment Community Contact:
Elizabeth Woo
Senior Director, Investor Relations
Biogen, Inc.
(617) 679-2812