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Court Denies Tekmira Bids to End Alnylam Patent-Infringement Case, Disqualify Alnylam's Counsel

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Alnylam Pharmaceuticals last week scored a victory in its ongoing patent-infringement suit against partner Tekmira Pharmaceuticals after the US Federal Court hearing the case ruled that Alnylam does, as the exclusive sublicensee of the intellectual property at issue, have the right to sue Tekmira.

As a result, Tekmira's request to dismiss infringement claims against it has been rejected, permitting the case to proceed. Meanwhile, Alnylam announced that it has expanded its patent dispute against Vancouver, British Columbia-based Tekmira with legal action in Canada.

Separately last week, the court also denied a Tekmira motion to disqualify Alnylam's legal counsel in suit because one of the attorneys had previously represented Tekmira in a separate legal dispute. However, it did order the law firm to take precautions to prevent inappropriate interaction between the lawyer that handled the Tekmira case and the ones heading Alnylam's suit.

The legal fracas began in early 2011 when Tekmira filed a lawsuit claiming that trade secrets related to its core lipid nanoparticle delivery technology had been misappropriated by Alnylam, which is a licensee of that technology (GSN 3/17/2011).

The suit specifically references the so-called MC3 lipids being used by Alnylam in a number of its drug candidates. It was later expanded to include Alnylam collaborator AlCana Technologies, which was founded by former Tekmira employees and was later found to have taken confidential documents and materials from Tekmira (GSN 1/12/2012).

While this case was ongoing, in January of this year, Alnylam filed its own lawsuit against Tekmira, claiming that it had infringed patents related to the encapsulation of nucleic acids in lipids that had originally been assigned to Inex Pharmaceuticals, the parent firm of Tekmira predecessor Protiva Biotherapeutics, but exclusively licensed to Alnylam in 2007 (GSN 1/19/2012).

According to Alnylam, it did license the patents to Tekmira in 2008, but only for the development of RNAi drugs against pre-defined targets. Therefore, a four-year target validation deal Tekmira inked with Bristol-Myers Squibb, which included the use of its lipid nanoparticle technology, represents an unauthorized use of the patents, Alnylam maintains.

Tekmira had asked for a dismissal of these patent-infringement charges, telling the court that Alnylam only has the right to enforce the patent rights against third parties, not the patentee — which, in this case, would be Tekmira by virtue of its transformation from Inex (GSN 3/8/2012).

“Tekmira did not grant Alnylam the right to enforce Tekmira’s own patents against Tekmira,” the company said in its request for dismissal.

But last week, the court sided with Alnylam, noting that the sublicense agreement “plainly grants Alnylam the right to exclude all parties — including Tekmira — from using the patents at issue. Because Alnylam has the right to exclude Tekmira from using the intellectual property, it has the legal standing to sue it for infringement.

“Tekmira and Alnylam could certainly have written a provision into their contract explicitly denying Alnylam the right to sue Tekmira for infringement, or explicitly reserving Tekmira the right to practice in Alnylam’s field,” the court added. “But explicitly granting Alnylam the right to sue third parties does not implicitly deny it the right to sue Tekmira.

“The most natural reading of the license agreement as a whole is that Tekmira transferred to Alnylam all the rights associated with an exclusive license in Alnylam’s field — including the right to sue Tekmira for infringement in that field,” it concluded. “Therefore, Alnylam has standing to sue Tekmira on the claims asserted.”

“We are pleased with the ruling of the Federal Court that has confirmed Alnylam’s rights to enforce certain in-licensed patents against infringing activities,” Alnylam CBO Laurence Reid said in a statement. “In addition, Alnylam has multiple other patents that protect our innovative discoveries, including the patent used in our expanded infringement action against Tekmira in Canada.”

In regards to this newest wrinkle in the patent dispute, Alnylam said that it filed a complaint in the Federal Court of Canada alleging Tekmira has infringed a fundamental Alnylam patent covering the use of a dsRNA to inhibit the expression of a target gene.

Alnylam said the infringement has occurred through Tekmira's “collaboration activities and in its own research and development efforts.”

'Ethical Wall'

According to court documents, the University of British Columbia sued Tekmira in 2009 for failure to pay royalties under a licensing agreement. Tekmira was represented by the law firm Orrick, Herrington & Sutcliffe, and the case was settled by mediation.

An Orrick lawyer who had worked on the case later took a job with the law firm McDermott Will & Emery, which is now representing Alnylam in the patent case. McDermott voluntarily isolated the attorney from the firm's representation of Alnylam.

Tekmira argued that the two cases are “substantially related,” disqualifying Alnylam's counsel, according to the documents, but last week the court determined that they focus on wholly different sets of issues and that they were not, in fact, tied together closely enough to warrant disqualification — a “drastic measure, which courts should hesitate to impose except when absolutely necessary.”

The court did, however, tell McDermott to “maintain the ethical wall separating [the lawyer] from its Alnylam representation until the present action is concluded.”

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