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Initial USPTO Ruling Invalidates WARF hESC Patents, But IP Dispute Seems Far from Over

The US Patent and Trademark Office last week determined in a preliminary ruling that three core patents held by the Wisconsin Alumni Research Foundation describing techniques for isolating and propagating embryonic stem cells are invalid because the methods were obvious based on prior publications and patents.
The findings are an initial victory for watchdog groups and a scientist that requested a reexamination of the patents, and, according to some reports, may be good news for companies that non-exclusively license the patents from WARF.
However, according to some experts, the USPTO’s findings were expected and are only the first step in a likely series of forthcoming disputes that could last for years. Insiders also note that it is too early to say how the USPTO’s decision may affect the multiple licensing deals WARF has in place for the IP.
The USPTO’s findings were handed down last week after watchdog groups the Public Patent Foundation and the Foundation for Taxpayer and Consumer Rights and stem-cell researcher Jeanne Loring of the Burnham Institute for Medical Research jointly filed for a reexamination of the patents in July.
In February, WARF announced that it would ease restrictions on its stem cell licensing requirements, a move that PPT and FTCR applauded and claimed was a direct result of their challenge (see BTW, 4/5/07).
However, PPT and FTCR also maintained that the changes were inadequate and that the patents should be invalidated because prior art existed describing how to isolate and grow ESCs in mice.
Last week, the patents’ questioners got their wish in the form of a non-final detailed action released by the USPTO that summarily rejected all of the claims in WARF’s patents, Nos. 5,843,780; 6,200,806; and 7,029,913. In its findings, the USPTO cited prior art provided by the challenging group, which included US Patent No. 5,166,065 and various scientific publications by different scientists.

“The claimed ES cell composition appears to be the same or obvious variations of the reference teachings, absent a showing of unobvious differences,” the UPSTO’s action statement reads. “The office does not have the facilities and resources to provide the factual evidence needed in order to determine and/or compare the specific ES cell composition of the instant versus the reference composition.
“In the absence of evidence to the contrary, the burden is upon the applicant [WARF] to prove that the claimed ES cell composition is different from the one taught by prior art and to establish the patentable differences,” the action statement continues.
Representatives from WARF declined requests for an interview. However, in a statement, WARF made it clear that it intends to plead its case, claiming that a preliminary ruling is “not at all unusual,” and that the first rejection gives WARF the opportunity to respond directly to the examiner, “a response in which WARF will vigorously defend its patent claims.”
That response, WARF said in the statement, “could persuade the examiner to sustain the patents and terminate the reexaminations. If the examiner maintains the rejection, WARF could, and most probably would, appeal the examiner’s decision to the PTO Board of Patent Appeals. And, if that body fails to sustain the patents, WARF can then appeal to the courts.”
This process could take months to years, and WARF’s patents remain enforceable during this time. Depending on how long the process takes, the initial decision may not be too detrimental to WARF since the patents expire in 2015.
Still, the findings are clearly a positive for PPT, FTCR, and Loring. In addition, the USPTO’s decision may be a boon for some companies that license the patents from WARF. In an article published April 3 in The Scientist, Michael West, president and CSO of licensee Advanced Cell Technology, said that it was a “good day” for his company. Representatives from ACT declined to elaborate.
Other licensees disclosed by WARF include Geron, which is an exclusive licensee; Aruna Biomedical, Chemicon (now part of Millipore), ES Cell, ProteoSys, Stem Cell Technologies, and Cellular Dynamics International, which was co-founded by James Thomson, the University of Wisconsin inventor named on the patents in question. Geron holds exclusive rights to the patents in question because it funded Thomson’s research. In addition, Geron holds a license to additional WARF patents related to stem cells but not under reexamination.
In a statement last week, Geron voiced its support for WARF’s defense of the patents.
“Thomson’s success in isolating human embryonic stem cells is recognized by the scientific community as a significant breakthrough, and the scope of the patents granted to WARF is commensurate with that achievement,” Geron said. “It is routine for the USPTO to grant patent reexamination requests. Furthermore, it is common for the USPTO to issue preliminary rulings that reject patent claims, only for [it] to terminate reexaminations and uphold patent claims in later stages of the review and appeals process.”
For other licensees of the patents in question, it’s business as usual for the time being.
According to Roy Millender, Millipore’s director of technology transfer, Millipore is in a “wait-and-see” mode regarding the patents. Millender said that Millipore licenses the patents from WARF that are being reexamined, but that it also licenses a number of other technologies from the university.

“We’re not in the business of commenting on whether people’s patents are valid or invalid – that’s for those folks that feel as if they couldn’t get along with WARF.”

“It’s too soon to tell for us what, if any, actions we would take,” Millender said. “We negotiated and have done what we thought was best long ago with WARF. We’re very satisfied with the relationship. We’re not in the business of commenting on whether people’s patents are valid or invalid – that’s for those folks that feel as if they couldn’t get along with WARF.
“[The University of Wisconsin] is a very strong research institution and is very well known worldwide to have produced a number of innovative inventions over the years, and we would look to continue to have good relations with them,” he added. “Many institutions have patents that may or may not be valid. Since those folks that work there are our very same customers, it’s very difficult for us to bite the hand that feeds us.”
Another company that licenses WARF’s patents is Stemina, a Wisconsin-based firm combining metabolomics and hESCs for drug discovery. Stemina was founded late last year by Elizabeth Donley, who previously served as general counsel and director of business development for WARF. Stemina licenses the patents for freedom to operate, but its own patent applications for hESC-based research are not reliant on WARF’s core IP.
According to Donley, the groups challenging WARF’s patents have done a good job promoting their agenda, but she suggested that most of the media coverage of the patent dispute has been sensationalized due to the burgeoning importance of stem cell research.
“Frankly, there has been a lot of hay made about the base patents in the [mice],” Donley told BTW. “But the field is extraordinarily crowded, with all the different culture methods, the different uses, and the different derived cell types.”
Donley refuted the claims of PPT and FTCR that if the patents are permanently found to be invalid, researchers will be able to work with them freely.
“No, absolutely not,” Donley said. “They just move over one inch to the next patent application, and unfortunately some of those are held by for-profit companies that may not even allow access to the technology. So much of it is smoke and mirrors, and for some reason, people tend to glom on sensational statements like: ‘The patents fell! The claims are invalid!’ It’s just baloney, and anyone who takes the time to understand the process realizes this.”
Stemina, like Millipore, has also licensed WARF’s core hESC patents, primarily because it feels the patents are valid, and even if they are ultimately found to be invalid, that determination may take several years – especially since there will be “an element of politics” surrounding the proceedings because of public scrutiny of the status of the patents.
“The fact of the matter is, most often when you make a patent application or are involved in a reexamination, all, if not a great majority of the patent claims are rejected in a non-final office action,” said Donley, who is also a lawyer specializing in intellectual property. “It didn’t surprise me a bit that they came back rejecting all the claims.”
Donley added that she believes that the patents will ultimately stand, if not be narrowed slightly.
“We’ve looked at the obviousness question a lot over the years,” she said. “There are a lot of other incidents, public and non-public, that these patents have faced because they are so broad. But the fact of the matter is that it didn’t work to use the same formula that was done in mice. And many people, including Jeanne Loring, were chasing the holy grail of [hESCs] and were not able to do it using the previous formulas that worked in mice.”
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