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CSHL Sues Former Patent Counsel for Mishandling shRNA Patent Applications

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By Doug Macron

Cold Spring Harbor Laboratory last week filed a lawsuit alleging that a law firm hired to prosecute a series of RNAi-related patent applications stemming from the work of CSHL researcher Greg Hannon mishandled the intellectual property, jeopardizing the institution's ability to obtain patent protection on Hannon's inventions, according to a court filing obtained by RNAi News.

According to CSHL's complaint, the law firm, as well as an individual lawyer named in the suit, committed "malpractice through their failure to conduct the prosecution according to a reasonable standard of care," which has created the perception that Hannon's work is not "sufficiently unique" from prior art.

As a result, CSHL estimated that it has lost as much as $82 million in licensing and royalty income, as well as the opportunity to establish a startup company to commercialize Hannon's inventions, the suit adds.

At the heart of the litigation are two US patent applications — Nos. 20040018999, filed May 16, 2001, and 20020162126, filed May 24, 2001 — as well as a related international patent application.

The intellectual property claims "methods for attenuating gene expression in a cell using gene-targeted double-stranded RNA," namely an shRNA, according to the US patent applications' abstracts. "The dsRNA contains a nucleotide sequence that hybridizes under physiologic conditions of the cell to the nucleotide sequence of at least a portion of the gene to be inhibited."

When the applications were being drafted by Matthew Vincent, an attorney for the law firm of Ropes & Gray, "rather than providing an original, complete description of … Hannon's work, Vincent 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.

That patent application gave rise to US patent No. 6,506,559, entitled "Genetic Inhibition by Double-Stranded RNA" — the seminal patent in the RNAi field, which is assigned to the Carnegie Institution.

About half of the "detailed description of certain preferred embodiments" sections of the three Hannon patent applications consist of text copied from the Fire and Mello application, CSHL charges in its suit. "By relying extensively on this text to describe … Hannon's inventions, and in particular, the shRNA technology that is the subject of the pending … applications, Vincent failed to fully describe and distinguish … Hannon's inventions from the different technology invented by Fire."

Moreover, Vincent filed numerous follow-up continuation and continuation-in-part applications using the text from the Fire patent application, "allowing several opportunities to properly re-draft the Hannon applications in such a way that relied on an original description of [Hannon's research] … to accurately describe the shRNA technology," CSHL alleges.

At the same time, neither Vincent nor Ropes & Gray brought the copying of the Fire text to the attention of Hannon or CSHL, the suit states. "Despite being aware of how their negligent conduct had compromised the Hannon applications, [they] continued to prosecute the applications while hiding this fact … [depriving Hannon and CSHL] of any opportunity to mitigate the harm caused by [the] … negligent prosecution, including the opportunity to appropriately re-draft the specification in a timely fashion."

By relying on text copied from the Fire patent, and instead of re-drafting the Hannon applications, Vincent knowingly "risked the false implication that …. Hannon's shRNA technology was either something that Fire invented or was suggested by the Fire application," CSHL charged in its suit.

In reality, Hannon's shRNA methods "represented a considerable advance over the prior art, including the Fire patent, which failed to provide any solution for how to use RNA interference in mammals without killing the treated cells through the so-called interferon or protein kinase response," the institution added.

The result was the rejection of Hannon's first application by the US Patent and Trademark Office, which cited the IP's claims as being anticipated by the Fire patent. Subsequent efforts by Vincent to overcome this rejection failed, CSHL said in its suit, with the patent office noting that "it is unclear how [Hannon's invention] differs from what has been disclosed by the prior art."

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Vincent continued to use text from the Fire patent in a follow-up patent application, which was "further compounded by his failure to include additional [information] regarding the use of shRNA in mammalian cells that … Hannon had available at the time he filed" the new application, the suit alleges.

According to CSHL's suit, the USPTO first noted "the similarity of certain text in the Hannon applications to that in the Fire application" in 2007. However, it wasn't until a CSHL office reviewed the patent office's rejection of the Hannon IP in 2008 that the institution became aware of the alleged misconduct of Vincent.

By this time, the Hannon applications had already been "unfairly prejudiced by the erroneous perception" that Hannon's work was not sufficiently novel compared with Fire and Mello's to warrant a patent, the suit adds.

CSHL said that once it became aware of the situation, it met with representatives of Ropes & Gray, as well as Vincent, who acknowledged that he was "aware that portions [of the Hannon applications] had been copied" from the Fire patent.

The law firm, however, refused to agree that it would "unconditionally assist CSHL in providing the [USPTO] with all relevant facts" until CSHL signed a waiver releasing the law firm from any liability for misconduct, the lawsuit states. CSHL said it then secured new legal representation.

In its suit, CSHL alleges that it has lost opportunities for licensing Hannon's inventions, including, at a minimum, "lost opportunities resulting from the loss of patent term directly caused" by Vincent's malpractice.

"CSHL expects that the annual amount of such licensing opportunities it has lost … to be at least $22,500,000 for lost commercial user license income and $9,000,000 for lost royalty income," should it ultimately lose only five years of patent protection on Hannon's inventions, the suit states.

The financial loss could be as high as $57.5 million for lost commercial user license income and $19 million for lost royalty income, should the Hannon inventions lose 15 years of patent protection, it adds.

CSHL said in the suit that its total losses related to Vincent's alleged malpractice is between $37.5 million and $82.5 million, which it is seeking to recoup at trial. The institution is also seeking punitive damages and attorneys' fees and costs.

A CSHL representative declined to comment on the case. Officials from Ropes & Gray were not available for comment.

Professional Misconduct

To bolster its case against Vincent and Ropes & Gray, CSHL noted in its lawsuit that Vincent tendered his resignation from the law firm in July 2009 as a result of an investigation into his professional conduct by the Commonwealth of Massachusetts.

According to CSHL, in an affidavit, Vincent stated that he had formed in 2002 a business entity that performed patent database searches, but did not inform Ropes & Gray of this fact. He then billed the law firm for more than $700,000 in services performed by his company, which was paid based on his approval as an attorney with the firm, the suit states.

"CSHL was among the clients of [Ropes & Gray] who were victimized by Vincent's conduct," the lawsuit adds. "While serving as CSHL's primary patent prosecution counsel, [the firm] billed and collected approximately $10,000 from CSHL in the name of work allegedly performed" by Vincent's company.

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