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CSHL Expands Lawsuit Against IP Counsel to Include Charges of Dealings with Other RNAi Clients

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By Doug Macron

Cold Spring Harbor Laboratory has filed court papers seeking to expand its lawsuit against law firm Ropes & Gray to include charges that it inappropriately represented clients in the RNAi field "whose interests were in direct conflict" with the research institution.

CSHL specifically names Arrowhead Research subsidiaries Calando Pharmaceuticals and Insert Therapeutics, which were merged into one firm under the Calando name in 2008, and RXi Pharmaceuticals.

Notably, CSHL points out in its latest court filings that former Ropes & Gray attorney Matthew Vincent, who is at the heart of the litigation, was a co-founder of Calando, and alleges that Vincent included CSHL intellectual property in a 2002 Insert patent application.

The legal row began in February when CSHL sued the law firm and Vincent for allegedly improperly prosecuting two patent applications — Nos. 20040018999, filed May 16, 2001, and 20020162126, filed May 24, 2001 — covering the work of CSHL investigator Greg Hannon (GSN 2/25/2010).

In its suit, CSHL charges that Vincent, who was handling the filings, did not provide "an original, complete description of … Hannon's work … [but instead] relied upon copying extensive portions of text — essentially verbatim — from a prior patent application" published by RNAi pioneers Andrew Fire, of the Carnegie Institution of Washington, and Craig Mello, of the University of Massachusetts Medical School.

Fire and Mello's work gave rise to US patent No. 6,506,559, entitled "Genetic Inhibition by Double-Stranded RNA" — the seminal patent in the RNAi field.

In doing so, Vincent created the impression that Hannon's work was "either something that Fire invented or was suggested by the Fire application," rather than a novel invention that "represented a considerable advance over the prior art," the suit alleges.

The suit further claims that Vincent concealed his actions from CSHL and Hannon, and by the time the situation came to light, the applications had already been "unfairly prejudiced." Both applications were ultimately rejected by the USPTO.

CSHL said that the total losses related to Vincent's alleged malpractice are as much as $82.5 million, which includes lost revenues from commercial user licenses and royalties.

Vincent was disbarred in Massachusetts late last year over allegations that a company he created inappropriately billed Ropes & Gray clients.

For its part, Ropes & Gray has maintained in court documents that the USPTO rejections of the Hannon applications were not solely based on the Fire IP, but also because of the inventions of other researchers.

"CSHL does not suggest in its complaint that … Vincent's alleged malpractice did anything to contribute to the [USPTO's] determination that the disclosures of these other scientists besides … Fire precluded claims in the Hannon applications," the law firm noted.

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Ropes & Gray has asked for a dismissal of the case (GSN 4/5/2010), which CSHL has opposed (GSN 4/29/2010).

Now, it seems, CSHL is aiming to bolster its case with additional charges of misconduct against Vincent.

According to letters to the court obtained by Gene Silencing News, the law firm representing the institute has recently discovered that the lawyer "represented and/or had business dealings with at least three [Ropes & Gray] clients in the field of shRNA" with interests "in direct conflict" with CSHL.

Through the discovery process, "CSHL has had a glimpse of Vincent's practice, which has revealed a lack of regard for rules of ethics, an ambivalence … toward CSHL, and a troubling tendency toward self-dealing," the plaintiff adds.

CSHL notes that Vincent is a co-founder of Calando, which was established by Arrowhead to advance the RNAi therapeutics activities of Insert (GSN 2/25/2005), and that he "was retained by Insert … without CSHL's knowledge or consent.

"As prosecution counsel for Insert, [he] co-opted the shRNA inventions of … Hannon for the benefit of Insert by including them in Insert's 2002 patent application," CSHL charges in a letter to the court. The institute did not provide specific information regarding the patent application in question.

Further, "Vincent later approached CSHL to propose a business venture [with] … Insert without disclosing his relationship with Insert or seeking a waiver of conflict from CSHL," the letter adds. Vincent went on to co-found Calando, and later approached CSHL about a business tie-up between that company and the institute, again without disclosing his relationship with Calando.

CSHL now alleges that Vincent shared its "shRNA know-how and trade secret information with Insert and Calando in connection with his representation of and business interests in" these firms.

The institute also charges that in 2007, Vincent inappropriately took on work from RXi Pharmaceuticals. Importantly, in 2007 CSHL non-exclusively licensed to the company shRNA technology developed by Hannon, an RXi co-founder, for research and therapeutic applications (GSN 3/22/2007).

Ropes & Gray "never informed CSHL that [it] had been acting as RXi's counsel since before the license agreement was entered," the institute said.

Based on these issues, CSHL said it has amended its complaint to add facts supporting claims of breach of fiduciary duty.

Officials from Arrowhead and RXi did not return requests for comment.


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