Dozens of patent challenges filed earlier this decade against core intellectual property held in the EU by array companies will likely conclude within the next few years, according to some attorneys familiar with the cases.
Additionally, the EPO remains the favored route to invalidate a company's IP in Europe because it is less expensive than opposing IP in individual countries and has farther reaching results, the attorneys say.
The most recent action by European patent regulators on array-based IP occurred last month when the EPO's Board of Appeals revoked European Patent 0834575, "Identification of nucleic acids in samples," which was held by Affymetrix and opposed by CombiMatrix and Clondiag Chip Technologies.
The EPO granted the patent in 2001, and the following year oppositions were filed by Roche, Abbott Laboratories, Applera, Mukilteo, Wash.-based CombiMatrix, and Jena, Germany-based Clondiag.
In 2005, the EPO's Opposition Division revoked the '575 patent, though Affy appealed the ruling (see BAN 3/9/2005). Roche withdrew its opposition in 2003, and in 2006, Abbott and Applera also withdrew their oppositions after concluding licensing agreements with Affymetrix (see BAN 3/7/2006).
Two other oppositions to Affymetrix patents have met similar fates in the EPO over the past year. Last summer, Affy withdrew its appeal of the EPO's decision in 2005 to revoke EP0834576, "Detection of nucleic acid sequences," which had been opposed by CombiMatrix, PamGene, and others.
And in October 2008, the appeals board of the EPO decided to maintain an amended version of EP0728520, "Printing molecular library arrays," which the EPO revoked in 2004 but amended during an appeals process in March 2008.
Axel Stellbrink, a patent attorney at Munich-based Vossius and Partners who represents Agilent Technologies and Metrigen in their opposition to several Affy patents in Europe, said last week that the resolution of these oppositions over the past year hint at what is to come over the next few years as the EPO works its way toward final determinations of the IP challenges.
"I expect this whole series of challenges to be resolved within the next year or so," Stellbrink told BioArray News.
He said that one of the reasons it has taken this long for the EPO to resolve its backlog of challenges to core array IP in Europe is that the "array business is a young technical field, and the EPO had to ask people to join their staff in order to be able to handle such applications."
Stellbrink represents Burlingame, Calif.-based Metrigen, formerly Protogene, in its opposition of Affy patent EP0619321, "Method and apparatus for investigating polynucleotide or amino acid sequences." The EPO's opposition division revoked the patent in November 2007, and Affy laid ground for an appeal with the appeal board earlier this year (see BAN 7/27/2007).
According to Stellbrink, oral proceedings in the appeal may not begin until early next year due to the appellate division's "huge workload."
Affy isn't alone. A 12-year-long opposition to Oxford Gene Technology's patent EP0373203, "Method and apparatus for analyzing polynucleotide sequences," ended in 2007 after the EPO amended the IP.
And last July, Eppendforf's EP1179180, "Method for the identification and/or the quantification of a target compound," was amended after years of opposition.
License Fees Lost?
Stellbrink said how the IP holders deal with these revoked and amended patents will depend on the terms of any licensing agreements they had signed for them since the IP was originally issued.
"If the patent is found invalid, a party might have to reimburse all the license fees paid in the past," Stellbrink said. Patent licensing is "sort of a risky business: A company that is demanding a license has got to know that at some point in time this patent may be found invalid and it cannot ask the patentee to pay the license fees. So these license fees are lost."
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Likewise, if a patent is revoked or amended it may not send companies running to renegotiate existing licensing agreements.
"It is not uncommon for licensing agreements to carry on while there is a patent somewhere in the world still in force," according to Tony Maschio, a patent attorney at London-based Edwards Angel Palmer and Dodge. "Unless these agreements are tied to specific European patents, it's not something about which to be concerned.
"But if the licensing agreements are tied to specific European patents, the agreements could be terminated," he added. "That is, of course, completely dependent on the language of the licensing agreement."
Additionally, the relevance of the EPO's decisions to partially or completely invalidate core array patents may be blunted, according to Maschio.
"A lot of these companies like Affy have built up such a reputation in the field that, even without this IP, they are still going to be doing business," he said. "Even if the patents were knocked out, it won't seriously affect the company. It could affect share price and perhaps more competitors will spring up, but patents filed in the 1990s will expire within less than 10 years anyway.
"In the beginning, IP is important when a company has nothing else," Maschio said. "But now they have facilities and know-how. If you are a user who wants to work with array technology, you are probably better off going with Affy than a new competitor anyway."
Affy addressed the EPO challenges against its IP in its most recent annual filing with the US Securities and Exchange Commission. The company called the pending oppositions "significant," and said that the resulting proceedings "could modify or reduce the company's patent protection and may cause the company to incur significant costs and consume substantial managerial resources."
Choice of Venue
The EPO remains the favored route to invalidate a company's IP in Europe because it is less expensive that opposing IP in individual countries and has farther reaching results, according to Stellbrink and Maschio.
"Opposition proceedings bear no cost risks regarding the legal fees involved, which, for this voluminous type of work, is kind of remarkable," Stellbrink said. "If we [were] in Great Britain and somebody [tried] to invalidate this patent, they would have to spend at least £200,000 [$278,000] or so."
"Certainly defending a patent in [the] EPO is hundreds of thousands of dollars rather than millions of dollars," said Maschio, referring to the average cost of defending a patent in the US or UK. "Compared to the money these companies are making from customers, it is worth it to defend their IP. And, remember, the people who are challenging them are paying just as much" in legal fees.
Another advantage of opposing IP in the EPO is that a revocation or amendment could result in a "central nullification" of the claims, Stellbrink said.
"Going the national route means that you can only invalidate the respective part of the national patent," said Stellbrink. "A patent could be invalid in the UK, but it is still [in] effect in Germany."