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Court Denies Nucleonics’ Request to Have Benitec Patent-Infringement Suit Re-Heard

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Australian expressed RNAi firm Benitec last week scored another legal victory in its efforts to end a patent-infringement battle it launched against rival Nucleonics after a US Court of Appeals denied Nucleonics’ request to have the case re-heard by the entire Federal Circuit.
 
“We are delighted with the ruling in this case,” Benitec CEO Sue MacLeman said in a statement. “This litigation has been going on since 2004, and we are pleased that with this further confirmation from a US court we can now focus our attention, efforts, and resources toward developing RNAi therapeutics.”
 
Benitec originally sued Nucleonics in 2004 to force the company to license its core US patent, but the Aussie shop eventually persuaded the court to dismiss the case because the row was draining its bank account and tarnishing its image.
 
After a US Federal Appeals Court earlier this year rejected Nucleonics’ request to re-open the case and force a ruling on the validity of Benitec’s patent, the company requested a so-called en banc review of the case, claiming that the court had erred in dismissing its appeal (see RNAi News, 7/26/2007).
 
Nucleonics said at the time that the appeals court’s decision was made “on technical grounds of subjective matter jurisdiction,” and noted that one of the three judges hearing the case supported the re-instatement of the lawsuit.
 
But last week, the appeals court denied Nucleonics’ latest request to re-open the case.
 
The decision left Nucleonics with one option should it decide to push the matter: appeal to the US Supreme Court.
 
Although officials from Nucleonics were not available for comment by press time, President and CEO Robert Towarnicki had previously told RNAi News that his firm was weighing the possibility of taking the case to the nation’s highest court.
 
If Nucleonics went ahead with a Supreme Court hearing it would mark the second time Towarnicki has been involved with a Supreme Court review of patent law. Before joining Nucleonics, he held a number of executive positions at Integra Life Sciences, the company that filed the patent-infringement suit against Germany’s Merck that would result in the milestone Supreme Court decision in 2005 on the statutory patent exemption 35 U.S.C. 271 (e)(1).
 
Coincidentally, that ruling, which in effect gives drug makers the right to use other companies' patented technology without a license to develop new human therapeutics, was the basis for Benitec’s argument that its patent-infringement suit against Nucleonics should be dismissed.
 
Patent Plays
 
In 2004 Benitec sued Nucleonics, Ambion, and GenScript for allegedly infringing patent No. 6,573,099, one of the first US patents in the RNAi field. Ambion and GenScript eventually licensed the IP and settled the case, though Nucleonics chose to fight (see RNAi News, 8/5/2005 and 3/16/2006).
 
As part of its legal strategy, Nucleonics sought a court ruling that Benitec’s ‘099 patent was invalid. It also opposed or requested reexaminations of certain Benitec patents in several nations, including the US.
 
In 2005, Nucleonics got what it wanted: The US Patent and Trademark Office rejected all claims in the ‘099 patent. In April 2007, Benitec filed its latest response to the USPTO attempting to address the issues that led to the rejection, but a final ruling by the patent office has yet to be made.
 
There is no set deadline for when the USPTO must render a decision on the appeal. 
 

“This litigation has been going on since 2004, and we are pleased that with this further confirmation from a US court we can now focus our attention, efforts, and resources toward developing RNAi therapeutics.”

Around the time of the USPTO’s rejection, and amid investor and board member concerns over how the lawsuits were affecting the company's image and pocketbook, Benitec ousted CEO John McKinley and replaced him with COO Sara Hall (see RNAi News, 1/21/2005))
 
Hall worked to bring Benitec back on course as a drug-development company and was able to dismiss her company’s suit against Nucleonics (see RNAi News, 9/5/2005). According to Benitec, that suit is no longer valid because the 35 U.S.C. 271 (e)(1) ruling gives Nucleonics the freedom to use patented technology — including that covered under the ‘099 patent — in its drug-development programs.
 
But the damage had been done; as late as the spring of 2006 Nucleonics continued to press for reinstatement of the lawsuit so that it could obtain a final ruling on the validity of the ‘099 patent (see RNAi News, 3/16/2006).
 
Since then, Benitec has undergone a major restructuring that included the elimination of its US operations and a retreat back to Australia as a smaller firm focused on collaborations and IP licensing.
 
Under a new management team, the company has made strides to get back on course, including signing a deal in the fall of 2006 that passed off responsibility for its IP estate to Australia’s Commonwealth Scientific and Industrial Research Organization (see RNAi News, 9/14/2006) and seeing its RNAi technology advanced into a phase I trial of an AIDS-related lymphoma treatment by partner City of Hope (see RNAi News, 6/14/2007).

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