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Facing Thorny HPV/HCV Patent Landscape, Third Wave Decides the Best Defense Is a Good Offense


Confronted with the threat of legal action from some of the largest players in the HPV- and HCV-testing arena, Third Wave Technologies carried out a preemptive legal strike last week to defend its still-nascent position in the market.

"Third Wave wants to clear any remaining ambiguities about the company's freedom to operate in valuable markets like those for [hepatitis C virus] and [human papilloma virus]," said John Puisis, Third Wave president and CEO, in a statement last week. The company filed a lawsuit against Digene that concerns that company's HPV test, while a second suit against Bayer, Bayer Healthcare, and Chiron, concerns HCV. Both tests depend on Third Wave's Invader technology, which the company has already defended in court against EraGen and Stratagene.

No company involved in the suits will speak on the record yet, but both of the complaints obtained this week by Pharmacogenomics Reporter suggest that Third Wave is looking to assure investors and potential customers that its HPV and HCV tests will be around for the long haul. But Madison, Wisc.-based Third Wave has picked serious opponents — Chiron scientists discovered HCV, and the company holds several patents related to the genome sequence of the virus, while Digene — which has licensed several HPV patents assigned to Georgetown University — has pledged that it will protect two patents at issue in the lawsuit, as it has done already in a suit against Ventana Medical Systems. Bayer and Bayer Healthcare have licensed the contested Chiron patents from that company, and have the right to assert infringement, according to Third Wave's suit.

"Because we were the first to identify and sequence the [hepatitis C] virus, we do have a pretty strong intellectual property position around it."

This all follows on the heels of a related suit by Gent, Belgium-based Innogenetics, which filed two separate cases against Third Wave and Abbott Diagnostics in the US District Court for the Western District of Wisconsin on Sept. 29, alleging that the companies had each infringed on its HCV genotyping patent No. 5,846,704, which covers a process for typing HCV isolates.

Third Wave and Abbott had refused to take a license to the technology, according to a statement from Innogenetics. The company said it expects a ruling within 12 months. Innogenetics' INNO-LiPA test and Bayer's Trugene HCV test are two important strain-typing tests that Third Wave's strain-typing Invader HCV test contends with.

Third Wave's actions for declatory judgment against Digene, Bayer, and Chiron were triggered partly by threats of legal action, according to the complaints on file at the US District Court for the Western District of Wisconsin. Although Third Wave is being sued over its HCV test — or perhaps because it is being sued in that area — the company seems to be doing what it can to eliminate doubt that is has the right to operate in the HCV-genotyping and HPV-genotyping markets.

Adam Chazan, an analyst who until last week covered Third Wave for Pacific Growth Equities, wrote in a brief report on the lawsuits that the company was "taking control of its own destiny to clarify looming HPV and HCV legal issues" in the Wisconsin district to "get home court advantage and a speedier outcome" in perhaps less than a year. News of the lawsuits implies that the company's legal expenditures will increase, Chazan wrote.

In its suit against Digene, Third Wave contends that the Gaithersburg, Md.-based company has "alleged through its counsel that Third Wave's products infringe Digene's [four] patents," and asks the court for a declaration that the company has not infringed any of the four patents, and that the patents are invalid.

In the complaint against Chiron, Bayer, and Bayer Healthcare, Third Wave contends that those companies, "through their conduct and statements directed to [Third Wave] and third parties, have created in [Third Wave] an apprehension that it will face an infringement suit or the continued threat of one if it commences or continues the production and sale of reagents and assays for analysis of hepatitis C virus." In a similar fashion to the Digene suit, Third Wave asks the court to find that its activities do not infringe on Bayer and Chiron patents, and that the seven patents are invalid. In addition, Third Wave asks the court to prevent Bayer and Chiron from threatening legal action or "charging or asserting" that their patents have been violated.

Chiron and Bayer

"Because we were the first to identify and sequence the [hepatitis C] virus, we do have a pretty strong intellectual property position around it," John Gallagher, a Chiron spokesperson, told Pharmacogenomics Reporter. He declined to discuss the lawsuit directly.

Third Wave is clearly working hard to fortify its spot in molecular diagnostics and stick with its plan to drive revenue "chiefly [with] the company's core genetics, cystic fibrosis and HCV genotyping reagents," John Puisis, the company's CEO, said in November.

Third Wave's suit concerns seven of Chiron's patents in which Bayer and Bayer Healthcare hold some rights: 5,712,088; 5,714,596; 5,851,759; 5,863,719; 6,071,693; 6,074,816; and 6,416,944. The '088, '596, '719, and '816 patents concern methods for using polynucleotides in detection or screening for HCV, while the '759, '693, and '944 patents cover methods for genotyping HCV by heteroduplex tracking assay; HCV genomic sequences for diagnostics and therapeutics; and methods of typing HCV, respectively.

In partnership with Ortho, Chiron makes immunohistochemical HCV tests, and separately it operates a blood-screening business that looks for several viruses, including HCV, Gallagher said. The blood-screening service uses transcription-mediated amplification technology from GenProbe, he added.

In May 2001, after a court battle, the company now known as Roche Diagnostics negotiated a license from Chiron for nucleic acid testing for HCV and HIV, and the company uses that intellectual property in its HCV diagnostics.

According to Chiron figures from 2001, approximately 50 million units of whole blood are donated and screened annually in target markets throughout the world, including approximately 18 million in Europe, 13 million in the US, and 6 million in Japan. As much as 70 percent of donated blood in the United States was tested with the Chiron Procleix HIV-1/HCV assay, the company said.


There are two versions of Digene's FDA-cleared test for HPV screening, the Digene HPV Test and the DNAwithPap Test. Not technically a strain-typing test, Digene's diagnostic looks for the presence of 13 different strains of high-risk HPV — those virus strains most closely linked to cervical cancer — using the firm's nucleic acid-based hybrid capture technology.

Third Wave, on the other hand, does not yet have an HPV test on the market, although the company's website still says that the Invader test was due in 2004. The company has also not mentioned the Invader HPV test in US Securities and Exchange Commission documents since its earnings report for the end of its 2004 fiscal year, which was issued March 16.

The "risks" section of that earnings report is nearly prophetic: The company said in the document that it had taken steps to respect intellectual property and avoid infringement claims, but that it "may nevertheless be forced to defend against claims of patent infringement."

In particular, the report said, "third parties own multiple patents relating to the hepatitis C virus and the human papilloma virus … As a result, we may become involved in patent litigation relating to our HCV or HPV ASRs."

Third Wave is suing Digene to invalidate patent numbers 4,849,332; 4,908,306; 5,643,715; and 5,057,411. The '332 patent relates to the use of nucleic acid probes against HPV type 35; '306 relates to the use of nucleic acid probes against HPV type 36; '715 relates to HPV type 52 "DNA sequences and methods" and their use; and '411 relates to "Type-Specific Papillomavirus DNA Sequences and Peptides," particularly the use of the L1 gene sequence to detect specific HPV types, according to a July Digene statement.

Digene sued Ventana Medical Systems, which sells a series of nucleic-acid based HPV probes under the Inform trade name, for infringing the '332 patent. Digene is also in arbitration proceedings with Beckman Coulter, which sold its HPV intellectual property to Ventana along with its papillomavirus business.

The '715 patent and the '411 patent are the subjects of litigation between Digene and Georgetown University that began in October 2004. Georgetown licensed the two genes to Digene for use in its HPV test, but the university sued the company for royalties that it felt were owed under the licensing agreement.

Digene and Georgetown settled the suit in July, with Digene recording a pre-tax charge of $7.5 million in the quarter ended June 30, 2005. Digene will also pay Georgetown ongoing royalty fees to Georgetown University.

— Chris Womack ([email protected])

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