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Australian Patent Office Advances Move By Nucleonics to Invalidate Benitec IP

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When it was named in a patent-infringement suit filed by Benitec, Nucleonics declined to go the way of its co-defendants and settle the matter with a license to Benitec’s DNA-directed RNAi technology.

Instead, Nucleonics decided to fight and began launching attacks of its own. Now it appears that the company’s strategy is about to start paying off: Following a review of two Benitec patents made at the behest of Nucleonics, the Australian patent office (known as IP Australia) is poised to begin proceedings that could result in the revocation of the patents.

Earlier this year, Benitec sued Nucleonics, Ambion, and GenScript for allegedly infringing US patent number 6,573,099, which covers the core of Benitec’s ddRNAi platform (see RNAi News, 4/2/2004). The patent, entitled “Genetic Constructs for Delaying or Repressing the Expression of a Target Gene,” essentially claims the knocking down of gene expression in plants and animals using DNA that transcribes double-stranded RNA, one strand of which has a sequence complementary to that of the target gene.

While Ambion and GenScript settled with Benitec, Nucleonics maintained that it did not need a license to ddRNAi technology and began a legal defense that included calling into question the validity of Benitec’s IP (see RNAi News, 8/13/2004, 9/3/2004, and 7/9/2004).

Taking the offensive outside of the courtroom, Nucleonics also began asking patent offices in the US and Australia to re-examine the validity of three Benitec patents (see RNAi News, 9/10/2004, 10/8/2004, and 11/5/2004).

In the two requests made to IP Australia, Nucleonics asked the commissioner of patents to re-examine Benitec’s core Australian patent, number 743316, entitled “Control of Gene Expression,” as well as a follow-on patent, number 2001100608.

The primary Australian patent covers “recombinant DNA [used] to post-transcriptionally modify or modulate the expression of a target gene in a cell, tissue, organ, or whole organism, thereby producing novel phenotypes,” according to its abstract. “Novel synthetic genes or genetic constructs, which are capable [of] repressing, delaying, or otherwise reducing the expression of an endogenous gene or target gene in an organism when introduced thereto” are also covered by the patent, the abstract adds.

In its letter requesting the re-examination of the ‘316 patent, Nucleonics provided 24 examples of prior art that it said demonstrates seven independent claims of patent, as well as all of the claims dependent on them, are not novel and therefore not patentable.

While not every example of prior art provided by Nucleonics in the letter was accepted as relevant by the Australian patent examiner conducting the review, a letter sent to Benitec and Nucleonics on Nov. 17 from IP Australia indicated that all the patent claims called up for review by Nucleonics were found to be “not novel” based on various examples of prior art.

With regards to the follow-on patent, Nucleonics provided IP Australia with 26 examples of prior art. Again, not every example was considered relevant or proved to the patent office that Benitec’s claims are not novel. However, a Nov. 26 letter sent from IP Australia to Benitec and Nucleonics indicated that the agency found that all of the patent claims brought up for re-examination were “not novel” in light of different examples of prior art.

Now that the reviews have been completed, Benitec has two months from the dates on the examiner’s letters to “respond to the report and submit their own evidence with regards to the findings,” Fatima Eatie, commissioner of patents at IP Australia, told RNAi News this week. This means that the deadlines for Benitec’s responses are Jan. 17 and 26, 2005, respectively.

Eatie declined to comment specifically on the re-examination proceedings.

According to Nucleonics CEO Robert Towarnicki, if Benitec doesn’t act, “the [patents are] gone.” If they do act, “it’s as if they’re applying for a new patent — they have to dispute all of this, limit or rewrite claims, and try to find a claim that will stick. At the end of that, we have the [option] to oppose any new claims,” he told RNAi News this week.

“We’re happy with the outcome — we couldn’t have asked for anything more,” Towarnicki added. “We got every claim [we asked to be reviewed] invalidated.”

John McKinley, chairman and CEO of Benitec, told RNAi News this week that he had not seen the first letter from the patent examiner, but said that the findings were part of the “normal process” associated with a request for a patent re-examination.

“It’s not a ruling,” he said. “The way that the Australian patent office deals with these things is that they do a cursory review. They don’t do a material review — they, in fact, leave it to the parties [involved in the re-examination proceedings] to be able to respond to the issues.

“What we believe would come out of this is an even stronger patent on our side, even with amended claims,” McKinley added.

Eatie, however, said that the review process was a “detailed” one. “It’s in effect a fresh examination,” she added.

Responding to McKinley’s description of the patent office’s review, Towarnicki said in an e-mail to RNAi News this week that he finds “any dismissal of the examiner’s work as cursory … to truly be disingenuous, and, perhaps more importantly, misleading to investors.”

McKinley made his statements to RNAi News before the second letter from IP Australia was available. He declined to comment further in light of the second letter, referring RNAi News instead to a company press release issued late Wednesday.

In that statement, Benitec acknowledged that it has the opportunity to respond to the patent examiner’s reviews, as well as to “make amendments to any of the claims within [the patents] to rebut arguments made by the examiner and/or clarify the scope of the claims.” The company added that it will “continue to defend itself against Nucleonics’ … attacks on its patent position.”

According to Eatie, if Benitec responds to the reviews, IP Australia would review their responses “and … may issue a further report based on what’s there.”

She said that although the response-and-review process could theoretically go on indefinitely, “in practice [there would probably be] about three reports; after the third report we would set a hearing” with the patent holder where a final ruling would be made.

At the hearing, “we would try and make a decision, and obviously we make the decision as an office,” Eatie added. Benitec, however, “could appeal that decision through a number of mechanisms … including a federal court.”

In the US, where Nucleonics has asked for a re-examination of Benitec’s ‘099 patent, Towarnicki said in an e-mail to RNAi News that the company’s request is pending and that “decision on the request … will be mailed within three months from the [Oct. 4, 2004] filing date of the request.”

Towarnicki added in the e-mail that Nucleonics continues to plan to “vigorously defend against the Benitec lawsuit in the US courts.”

— DM