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Dharmacon Asks Court to Dismiss MIT Suit as Fisher Looks to Escape the Fray

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Dharmacon has told a US District Court that a Massachusetts Institute of Technology lawsuit charging the company with breach of contract and patent infringement intentionally misrepresents a licensing arrangement between the parties, according to court documents obtained by RNAi News.

In a late-May court filing, Dharmacon also alleges that the patent infringement portion of MIT's suit is merely an attempt to "intimidate" the company, which has filed a counterclaim seeking a court ruling that it neither violated its contract with MIT nor infringed the patent in question.

Separately, Fisher Scientific, Dharmacon's parent company and co-defendant on the MIT suit, has filed a motion with the court to have the case against it dismissed because its operations are distinct from Dharmacon's.

In January, MIT sued Dharmacon for allegedly failing to meet its royalty obligations under a December 2001 licensing deal for a portfolio of siRNA-related intellectual property (see RNAi News, 2/11/2005). The suit also named Fisher Scientific as a defendant.

That IP — which has been co-exclusively licensed to Dharmacon, Ambion, Qiagen, and Proligo — relates to the use of short pieces of double-stranded RNA to mediate RNAi. It includes US patent application no. 09/821,832; US patent application no. 10/255,568; and PCT application no. US01/10188. The IP estate is jointly owned by MIT, the Whitehead Institute, the Max-Planck Institute, and the University of Massachusetts, but MIT is authorized to act as licensing agent on behalf of all the institutes.

According to MIT's lawsuit, Dharmacon unilaterally reinterpreted its license and has not paid the requisite 7-percent royalty on any products that include siRNAs, "regardless of how the siRNA product is selected, purified, or treated, and including kits that contain any siRNA component."

A few months later, MIT expanded its suit against Dharmacon to include infringement of an MIT-controlled patent covering reverse transfection technology (see RNAi News, 4/15/2005).

The US patent — number 6,544,790, and entitled "Reverse Transfection Method" — covers "a reverse transfection method of introducing DNA of interest into cells and arrays, including microarrays, of reverse transfected cells." It had been exclusively licensed to microarray developer Akceli, which formed a collaboration with Dharmacon in late 2003 to develop the technology for RNAi applications but went out of business shortly thereafter (see RNAi News, 3/19/2004).

Dharmacon Strikes Back

Now Dharmacon fired back at MIT, filing with the court an official answer to the institution's complaints.

In the filing, which is dated May 27, Dharmacon stated that MIT's lawsuit "constitutes a bad faith attempt by [the] plaintiff … to alter ex post the negotiated terms of its license agreement with [the] defendant. MIT intentionally overreaches in its interpretation of the license agreement to obtain a windfall from innovations that were developed wholly by Dharmacon.

"Indeed, the royalties MIT here seeks are not directly attributable to the products squarely contemplated in the licensing agreement, but rather are based on revenue derived from Dharmacon's proprietary value-added technology and product designs," the filing reads.

Further, Dharmacon stated in the court filing that MIT's addition of the patent infringement allegations to its suit represents the tacking on of an "unrelated, meritless … claim, which is a thinly veiled attempt to intimidate Dharmacon and is further evidence of MIT's bad faith motivation" in suing the company.

Dharmacon denied all of MIT's breach-of-contract and patent-infringement claims, and has argued that the institution's claims are ineligible for a number of reasons, including that they are being prosecuted in "bad faith and for improper purposes." Dharmacon has asked the court to dismiss all MIT's claims and award it the costs of defending itself plus additional relief deemed proper by the court.

Dharmacon further alleges in its counterclaim that MIT's actions violate Massachusetts law banning "unfair and/or deceptive acts and/or practices," and seeks a court ruling preventing MIT from terminating its IP licensing deal with the company.

The countersuit further seeks a ruling that Dharmacon's products or methods of making, using, or selling them do not infringe on "any valid claims" of the reverse transfection patent.

Fisher Tries to Keep its Distance

In a separate court filing, also dated May 27, Fisher Scientific has asked the court to dismiss MIT's lawsuit in regards to the company "because [the] plaintiff has failed to state a claim as to Fisher."

In a memorandum supporting is motion to dismiss that because the complaint, Fisher Scientific said that because MIT "offers no factual basis for any claims of liability against Fisher … dismissal of the … complaint in its entirety with prejudice is required."

Fisher states in the memorandum that "MIT greatly overreaches in its interpretation of its license agreement with Dharmacon, and it overreaches further by adding Fisher as a defendant in a transparent attempt to gain leverage. Indeed, the complaint does not allege any conduct on the part of Fisher."

The memorandum adds that "Fisher and Dharmacon are separate, distinct corporations, and the complaint provides no basis whatsoever for piercing the corporate veil between the two. … Accordingly, the contract-based claims against Fisher must be dismissed."

Additionally, the memorandum states, MIT's "complaint does not allege that Fisher was in any way involved with the alleged patent infringing activity of Dharmacon, nor does it even suggest any fraud on the part of Dharmacon or Fisher regarding their activity as separate corporate entities. Thus, the patent infringement claims against Fisher are defective and must be dismissed."

— Doug Macron ([email protected])

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