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USPTO to Reexamine Patent at Heart of ExonHit, Jivan IP-Infringement Battle

The US Patent and Trademark Office has agreed to re-examine a patent held by splice array maker ExonHit Therapeutics that is at the center of an ongoing patent-infringement lawsuit with Jivan Biologics, which also sells splice arrays.
Jivan filed a request for a patent reexamination in January, alleging that ExonHit did not cite prior art for the patent in question, No. 6,881,571, entitled “Qualitative differential screening,” when it was filed. The patent describes a method for screening for qualitative differences associated with alternative splicing events or insertions located in nucleic acid regions.
The acceptance of the re-exam request raises questions about whether it will impact the timing of ExonHit’s suit or even redefine the fundamental intellectual property in the splice array space.
“It’s entirely up the judge whether he wants to continue [with the suit], or whether he wants to put this on hold while the Patent and Trademark Office sorts it out,” Jonathan Bingham, chief technology officer at Jivan, told BioArray News last week.
“The significance of the re-examination is that if there is no patent, then there is no basis for any lawsuit,” he said. Bingham cited a 2006 North Carolina Journal of Technology study that showed that 10 percent of patents under re-examination are invalidated, while roughly two-thirds lose some claims during the process.
“We think we have a strong case; we know the [USPTO] missed some prior art the first time around, and this time we hope that they will be more thorough,” Bingham said.
ExonHit initiated a suit against Jivan in US District Court for the Northern District of California in March 2007. Neither ExonHit nor Jivan, both of which are privately held, disclosed the lawsuit at that time. The suit alleges that Jivan, by manufacturing, distributing, selling, and using splice array products, infringes the ‘571 patent.

“We think we have a strong case; we know the [USPTO] missed some prior art the first time around, and this time we hope that they will be more thorough.”

ExonHit is seeking damages related to infringement as well as a “reasonable royalty rate.” Jivan has denied the allegations. The company filed for summary judgment last month, which would enable the presiding judge, and not a jury, to make a final decision. It is now unclear how the patent re-exam will impact that request. ExonHit did not return e-mails seeking comment in time for this publication.
According to Bingham, the litigation “doesn’t make a big difference” for Jivan’s business. “With all arguments they are making, we can still have our product line,” he said. “If their patent is valid, then we still can sell our product line and if not, well, we can as well,” he said. He acknowledged that the firm has, in the past, considered a settlement, but that an agreement between the two companies could not be reached.
Still, he called the ongoing litigation a “distraction” for the company. “Obviously litigation takes time and money, but as far as the products and services we have offered it’s had no impact at all,” he said. “I can’t tell if it’s had impact on customers. Certainly people have asked us about it.”
A ‘Two-Company Space’
ExonHit and Jivan Biologics have been the two main companies in the array market that specialize in developing splice content for array-based studies, though Affymetrix is technically also a competitor because its exon array product also allows users to look at splice-variant content.
ExonHit’s arrays are manufactured by Agilent Technologies and Affy, while Jivan’s chips are made by Agilent and NimbleGen.
“For now it is really a two-company space,” Bingham said. According to Bingham, the IP questions raised by the ExonHit litigation may have been keeping other array companies out of the market until the issue is resolved.
“Demand is growing slowly and it will soon hit a curve where it really takes off, and I think ending this litigation is part of that,” he said. “Some of the bigger players in this space, like NimbleGen, Illumina, Agilent, and Affy will probably make plays for this space, once this ambiguity is cleared up.”
One company that has chosen to sit on the sidelines for the time being is ArrayIt, formerly TeleChem International, which produces a line of array products. In the past, ArrayIt had worked with Jivan in developing both a blood-focused splice array and cancer-focused splice array.
“The goal, of course, [was] to identify molecular signatures for cancer biology that could not otherwise be detected,” Todd Martinsky, executive vice president of ArrayIt, told BioArray News last week.
“The microarray works very nicely, [but] pressure from ExonHit gave rise to the decision to leave the market, then they went after Jivan,” he said. Despite this, Martinsky said that ArrayIt is “optimistic that the legal smoke will clear" and that ArrayIt and Jivan will be able to start producing arrays again in the near future.
According to Bingham, Jivan, outside of clearing any legal hurdles, is now mostly focused on building its customer base. “What we have seen is early adoption driven by primarily academics, but what we have seen in last year or so is more interest from drug development companies,” he said.
“We have major pharma clients and biotech companies that are working on this for diagnostics or biomarker applications, especially,” he added.

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