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CRISPR Patent Interference Likely Heads to Oral Arguments Over Preliminary Motions

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NEW YORK (GenomeWeb) – The CRISPR/Cas9 patent battle is unlikely to be over soon but  reached a milestone of sorts today, the last deadline for filing written arguments related to preliminary motions.

The US Patent and Trademark Office kicked off the interference proceeding in January, responding to claims from a party led by the University of California system that patents held by the Broad Institute conflicted with a patent application submitted by UC-Berkeley, based on priority.

How the judges of the US Patent Trial and Appeals Board choose to proceed from here could have major implications for the CRISPR/Cas9 patent landscape, even though they won't be ruling on which party has priority. The judges will have to weight arguments about several ideas put forward by lawyers for the University of California and the Broad Institute, respectively, which could break up the CRISPR/Cas9 IP estate. But before they can do that, the three-judge panel must decide whether they will hear oral arguments, which both sides have requested to make.

Jacob Sherkow, a lawyer and professor at the New York School of Law who has been closely following the matter, told GenomeWeb he expects the board will choose to hear them. "The issues are factually complex, and intertwined with various legal standards. In cases like this, oral arguments could be helpful," he said. "To a lay observer, I imagine it'll look like a trial."

Of the substantive motions the PTAB Board will rule on, only one has the chance to score a knockout blow. The Broad Institute is trying to make the case that there's no need for an interference proceeding, based on the argument that Feng Zhang invented a way to edit mammalian genomes that is separately patentable, something that goes above and beyond what UC's patent application covers. The motion says that Zhang's patents do not, in fact, interfere with UC's and is aptly named a no-interference-in-fact motion.

"Broad's [no-interference-in-fact] motion is the only one that could substantively resolve the entire dispute in one fell swoop," Sherkow said. "But there are other issues that could really narrow things, too."

If the judges rule in favor of an interference, their decisions in this act will set the stage — and the stakes — for the next.

In June, the Broad Institute's legal team also put forth the argument that Zhang's patents on the Cas9 variant from Staphylococcus aureus (SaCas9) and the use of a nuclear localization signal (NLS) for Cas9 should not be considered as part of the trial.

"Using Cas9 from Staphylococcus aureus in a CRISPR-Cas9 system for DNA cleavage or editing or for modulating transcription in a eukaryotic cell provides a surprising combination of benefits not taught or suggested by the prior art," they argued. SaCas9 is a smaller protein than Cas9 from Streptococcus pyogenes, the gold standard nuclease, thus more easily delivered into cells.

In its reply, UC's lawyers contended that using a smaller Cas9 protein or attaching an NLS would in fact have been a logical next step and not particularly clever. But the Broad Institute further countered that there were hundreds of smaller Cas9 proteins to choose from and, in the case of NLSs, "prior art taught that the inclusion of an NLS could adversely impact protein functionality and that the inclusion of multiple NLSs could have deleterious effects. There would have been no expectation […] that the addition of two or more NLSs to a prokaryotic protein such as Cas9 would have been beneficial."

If Broad wins this particular argument, it lessens the stakes of winning it all a little bit, Sherkow said, and resolves some of the commercial licensing issues.

For its part, the University of California's lawyers have been suggesting that the PTAB judges change the scope of what, exactly, is up for grabs. In June, they proposed that the judges re-write the "count" — the hypothetical patent claim set up to encompass everything on either side's patent or patent application — to include both a "single-molecule DNA-targeting RNA or guide RNA" comprising the tracrRNA and crispr RNA sequences (the single guide RNA, essentially) and the use of Cas9 in a cell.

UC contends that the sgRNA is a separately patentable invention and that the current set up doesn't recognize that. This re-framed count also changes the scope of the invention, covering the use of CRISPR/Cas9 anywhere, not just in eukaryotic cells.

The Broad Institute claimed this proposal is unfair, since Zhang's earliest work uses a two-molecule gRNA. Moreover, UC "actively campaigned in the USPTO for the declaration of an interference with a series of patents, all of which are limited to eukaryotic CRISPR methods. It is hardly 'unfair' to keep the eukaryotic limitation in the count and limit UC’s priority proofs," it argued.

"None of UC's claims is limited to eukaryotic cells," UC's lawyers countered. "If there is interference-in-fact, then the method in eukaryotic cells cannot be separately patentable."

All of these moves create the potential for a fractured CRISPR IP landscape. If the judges award UC a patent on the sgRNA but decide the use of CRISPR/Cas9 in eukaryotic cells is its own invention, companies could find themselves in need of two licensing deals instead of one.

It's tempting to suggest that this hypothetical scenario might play out along the lines of the intellectual property history of RNA interference, where entrants into the RNAi therapeutics market signed scores of cross-licensing deals to secure their position. But really, there's only one thing that's clear: "The spoils are yet to be determined," Sherkow said.

Among the minor decisions the board will also make is what evidence it will look at in its deliberations. Each side has filed a list of exhibits that it wants removed; however, in these cases, the judges are extremely unlikely to remove anything, according to Sherkow.

"The point of excluding evidence in a typical case is to avoid confusing or prejudicing a jury," he said. "When you're dealing only with judges, the risk of confusion or prejudice is low."

"If the no-interference-in-fact motion is denied, then we have an interference-in-fact, where the [PTAB] Board will have to decide [priority]," Sherkow said. "If things come to that, I suspect we'll have a major, substantive decision [on preliminary motions] come in the first or second quarter of 2017."

But that's unlikely to be even close to the end of the story, he said. The inference could last a year, or more, and whoever loses could appeal that decision, adding another year.

"As a lawyer, I think that's quick. But then again, I'm a lawyer," he said.

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