NEW YORK (Fortune) -- With its already-battered stock price sagging on the news of a sweeping patent-trial defeat Monday, ImClone Systems is hoping its chances will look up with an appeal. But the judge's decision doesn't appear to offer ImClone a lot of hope.

In an unequivocal opinion, U.S. district court judge Naomi Reice Buchwald ruled that a key patent protecting Erbitux, ImClone's lucrative cancer drug and only product, belongs to Israel's Weizmann Institute and not to ImClone (Charts). (Fortune had predicted that the biotech company would lose the trial; see "ImClone's Next Headache.")

The patent in question isn't the one awarded to renowned oncologist and former ImClone director John Mendelsohn for the monoclonal antibody that is the core of Erbitux. (That patent is set to expire next year.) Rather, this one protects the method of using a particular type of monoclonal antibody in concert with a traditional chemotherapy drug. Such combinations account for 85 percent of Erbitux's use, according to analysts.

The judge ruled that nearly 20 years ago, three scientists at Weizmann hatched the notion of combining the antibody with chemotherapy, but a former colleague, Joseph Schlessinger, shanghaied the idea and brought it to a corporate predecessor of Sanofi-Aventis (Charts), which then secretly applied for a patent on it. While the application was pending, Aventis licensed the rights exclusively to ImClone. (Schlessinger denied impropriety at trial and claimed credit for the antibody and the combination.)

The judge declared that ImClone and Aventis have "unclean hands" because they "willfully engaged in a course of conduct that prevented plaintiff from learning about [ImClone and Aventis'] patent application."

One factor that will work against any ImClone appeal: Judge Buchwald's decision turned overwhelmingly on the facts rather than on the law. That's crucial because, in general, the job of an appeals court is to assess the legal decisions made by the judge. Appeals judges are much more reluctant to overturn factual findings.

From the judge's perspective, the balance of proof wasn't even close. As she put it, "The Weizmann scientists have presented documentary evidence substantiating each step of the inventive process, in stark contrast to the dearth of evidence supporting the named inventors' version of events." She went on to describe the plaintiffs' corroborating evidence as "overwhelming," and of "extraordinary breadth."

By contrast, she repeatedly assailed the testimony of Schlessinger, who testified that he'd been nominated for a Nobel Prize and is now the chair of pharmacology at Yale University's School Of Medicine. "Schlessinger's explanation... can most generously be described as strained," Judge Buchwald wrote in her opinion.

Elsewhere, she commented that "This exchange represents one of many instances in which Schlessinger exhibited great reluctance to acknowledge a fact that he perceived to be injurious to the defendants' case." In various places, her opinion dismissed his testimony as "not credible," "contorted," "incredible" and "wholly unsubstantiated by any contemporaneous records." (At deadline, Schlessinger had not replied to a phone call and e-mail requesting comment.)

In a statement, ImClone said it "disagrees with the Court's decision, believes that the... scientists originally named as inventors are the correct inventors of the patent and intends to file an appeal." The statement also noted that ImClone "plans to file a declaratory judgment action... seeking a declaration of patent invalidity and non-infringement..."

Such an action would be bizarre, to say the least. ImClone just spent three years fighting fiercely to keep its right to a key patent - and now it's saying it was fighting for something that's worthless.

At trial, an ImClone executive emphasized the importance of the patent. Such patents, he testified, are "cornerstones for commercial products" and that ImClone "would not have made this kind of investment" in developing Erbitux without the patent. Finally, he testified that the patent could help ImClone block a competing drug from Amgen (Charts).

But that's effectively ancient history, according to ImClone spokesman David Pitts. In his view, the patent was worthy... until the moment that the company lost the case. "It's only valid if it remains with its existing owners," he maintains. Since the Weizmann scientists never applied for a patent, he says, "they have no rights to the patent."

It's hard to see such an argument prevailing. The judge's opinion ordered the United States Patent Office to list the Weizmann scientists as inventors on the existing patent. And as noted, the judge has already ruled that Aventis and ImClone misled the Weizmann scientists about their plans to apply for a patent.

While the next round of skirmishes begins, Weizmann will attempt to license the patent, says its lawyer, Nicholas Groombridge of Weil, Gotshal & Manges. His client would be willing to negotiate with ImClone, he adds. Pitts says ImClone would be willing to discuss buying the rights from Weizmann, but talks may hinge on whether or not ImClone can get exclusive rights to the patent. It's unclear whether other potential licensees will want to license the patent until the appeal is resolved.

A deal with Weizmann would cost ImClone. Citigroup analyst Yaron Werber anticipates that a new license would cost ImClone 2 to 3 percent of its Erbitux revenues. (In a research note after the verdict, Werber, who previously predicted ImClone's would lose its exclusive grip on the patent, added that "we anticipate that this verdict will be upheld in '08 when a final decision is rendered.")

And without the patent, analysts say, ImClone might find it harder to block certain uses of the potential competing drug from Amgen.

In the meantime, with Carl Icahn scooping up ImClone shares and the company's annual meeting scheduled for tomorrow, it's a safe bet that life will stay bumpy for ImClone and its shareholders for the foreseeable future.