ImClone Systems and Sanofi-Aventis agreed to settle a row with Yeda Research Development Corporation over the ownership of the patent for the cancer drug on Friday.

The dispute has been raging worldwide since the patent, number 6,217,866, was granted by the USPTO to ImClone Systems in April 2001. There were also disputes over foreign counterpart patents.

The agreement means that pending litigation in the UK, Germany, France and Austria will be stopped. The parties will notify the courts and patent offices of the settlement this week.

John H Johnson, new chief executive of ImClone, said the agreement “further solidifies its ability to maximize the commercialization of Erbitux in the US and abroad going forward".

Under the agreement, Yeda will be the sole owner of the patent in the US, while Yeda and Sanofi-Aventis will be the co-owners of the patent's foreign counterparts. ImClone and Sanofi-Aventis will also each pay Yeda $60 million, and ImClone will pay royalties on sales of the drug.

ImClone, which settled a similar dispute with Repligen Corp in September, has now resolved two important patent litigation claims this year.

In October this year in the UK, the House of Lords delivered a judgment giving Yeda an opportunity to pursue its claim to the patent taking the case back to the Court of Appeal, but now this will not take place.

There is speculation that the House of Lords decision played a role in parties agreeing to a settlement. Alan Johnson, a partner at Bristows, said the case was more notable for its commercial than legal importance, and was “fought long and hard mainly because of the amount of money that was at stake”.

Erbitux was developed in the 1980s by three scientists at the Weizmann Institute of Science in Israel, for which Yeda is the commercial arm.

It was discovered with the help of an antibody provided by Joseph Schlessinger, a former Weizmann researcher who was working at a predecessor company to Aventis and licensed it to ImClone.

Yeda took ImClone to court in 2003, as the names of the three scientists were not included as the inventors on the patent.

On September 21 last year, ImClone and Sanofi-Aventis lost a court ruling in New York. The Court ruled that three researchers from the Weizmann Institute of Science and Yeda be named as the sole inventors on the patent.

The ownership of the Erbitux patent has long attracted controversy but this development is believed to resolve the outstanding matters.

The invention relates to a way of inhibiting the growth of tumour cells. Sales of Erbitux worldwide top $400 million a year.