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Court Puts Temporary Limits on How Sirna May Use Protiva siRNA Delivery Technology

A California court this week issued a preliminary injunction limiting how Sirna Therapeutics may use an siRNA delivery technology developed by one-time partner Protiva Biotherapeutics until an ongoing legal dispute between the companies is settled.
The injunction marks a small victory for Protiva, which the court said had been seeking “a sweeping injunction mandating a return of all Protiva information and, in substance, a halt to Sirna’s work in connection with the manufacture, use, and sale of [its investigational hepatitis C drug] Sirna-034.”
Instead, the preliminary injunction — handed down by the Superior Court of the State of California, County of San Francisco — is defined by the strategic alliance agreement the companies signed in 2005 but which fell apart about a year later amid allegations that Protiva does not own the technology at the heart of the agreement.
Specifically, the court ordered Sirna “not to engage in product development in connection with the delivery of siRNA beyond the target areas set forth” in the strategic alliance. Targets covered under the 2005 agreement include hepatitis B and C, as well as PTP 1B, a gene associated with insulin resistance and diabetes.
“Further, Sirna is barred, except in connection with the development of products in the [agreement] target areas, from using any of the confidential and proprietary information received from Protiva,” the court said.
In a statement explaining its decision to issue the injunction, the court cited testimony of two experts brought in by Protiva — Stanford University researcher Mark Kay and Vanderbilt University’s Todd Giorgio — both of whom indicated that “Sirna did not and could not independently develop its delivery formulation without the use of Protiva trade secrets and know-how.”
According to the court, Protiva has pointed to Sirna’s “lightning-quick development” of its own lipid nanoparticle technology after gaining access to Protiva’s SNALP technology as “sufficient to establish an inference of copying.
“Although Sirna vigorously disputes this contention, it is the court’s view that the evidence presented in [declarations by Protiva experts] is sufficient to shift the burden of proof to Sirna to establish independent development of its delivery technology for the delivery of siRNA,” it said.
In light of these and other factors, “a preliminary injunction must issue to preserve the status quo prior to trial,” the court said.
In its statement, the court also hinted that it expects Protiva may ultimately prevail in the legal battle with Sirna.
“It is the conclusion of the court that Sirna has used and may be continuing to use Protiva trade secrets and know-how, and that Protiva is likely to prevail on its claim on anticipatory breach” of the companies’ alliance agreement, the court said in a statement of its decision to grant an injunction.
A Protiva representative declined to comment on the injunction. Officials from Sirna and its parent firm Merck did not return requests for comment.
Custody Battles
The dispute between Sirna and Protiva began in 2005 when the companies formed a strategic alliance to apply Protiva’s SNALP, or stable nucleic acid lipid particle, delivery technology to Sirna-designed siRNAs (see RNAi News, 4/8/2005). 
The collaboration appeared initially successful as Sirna published data later that year showing that SNALP-delivered siRNAs could knock down hepatitis B virus in mice (see RNAi News, 7/29/2005).
However, less than a year later the companies’ alliance abruptly broke down when Sirna sued Protiva in a US District Court for breach of contract and fraud, alleging that Protiva didn’t own the rights to SNALPs for RNAi applications (see RNAi News, 3/2/2006).

“It is the conclusion of the court that Sirna has used and may be continuing to use Protiva trade secrets and know-how, and that Protiva is likely to prevail on its claim on anticipatory breach” of the companies’ alliance agreement.

Sirna charged that those rights remained with Canada’s Inex Pharmaceuticals, Protiva’s one-time parent firm. Protiva, which is also based in Canada, soon sued Inex and countersued Sirna, alleging that the companies engaged in improper activities (see RNAi News, 3/30/2006).
In its suit against Inex, Protiva claimed the company made inappropriate statements indicating that Protiva did not own the SNALP technology in the RNAi field. Those remarks, Protiva alleges, killed the Sirna deal and scuttled a possible licensing deal with Alnylam Pharmaceuticals. Inex later countersued Protiva, and their legal wrangling continues in the Canadian courts (see RNAi News, 1/4/2007).
In its countersuit against Sirna, Protiva claimed that throughout the companies’ alliance Sirna maintained a "hidden agenda" to develop its own siRNA delivery technology using Protiva's proprietary technologies.
Coincidently, just before Sirna originally sued Protiva, Sirna’s then-President and CEO Howard Robin publicly stated that his company would be using its own lipid nanoparticle technology in its hepatitis C program rather than Protiva’s (see RNAi News, 1/19/2006).
Protiva’s suit against Sirna is scheduled to go to trial in November, while Sirna’s suit against Protiva was stayed in December until the Superior Court case is decided (see RNAi News, 12/7/2006).
In its statement regarding the injunction against Sirna this week, the court noted that a resolution of Protiva and Inex’s dispute will greatly impact the litigation between Sirna and Protiva, but stressed that “although a cloud may remain over Protiva’s ownership rights, that does not mean that Sirna has a right to use the proprietary information of Inex or the combined proprietary information of Inex and Protiva.”

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