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Dharmacon, MIT Settle Dispute Out of Court; Dharmacon s License to MIT IP Remains Intact

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The roughly year-old licensing dispute between Dharmacon and the Massachusetts Institute of Technology has been settled out of court, the companies said last week.

Although Dharmacon and MIT had been slated to go to trial in February, an out-of-court settlement conference with a so-called "alternative dispute resolution provider" led to each party agreeing to drop all charges against the other while bearing its own costs, according to documents filed with the US District Court for the District of Massachusetts.

"We are delighted that this contractual dispute is now behind us and that it has been resolved on mutually agreeable terms," William Marshall, vice president of technology and development for Fisher Biosciences, said in a statement.

"MIT is very pleased that we have come to agreement on terms that are satisfactory to all, and we look forward to Dharmacon's success in this exciting field," Lita Nelsen, director of MIT's technology licensing office, added.

A spokeswoman from the MIT press office declined to comment on the settlement beyond Nelsen's prepared statement. Marshall told RNAi News that details of the settlement are confidential, but noted that Dharmacon's license to the MIT IP remains in full effect.

The legal battle began in January 2005 when MIT sued Dharmacon for allegedly failing to meet its 7-percent royalty obligations under a December 2001 licensing deal for a portfolio of siRNA-related intellectual property (see RNAi News, 2/11/2005).

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.

The question at the center of the dispute was whether Dharmacon is obligated to pay royalties on the full sale price of its siRNA products, which the company had conceded are royalty-bearing, or whether it should have been permitted to pay a reduced royalty on products that incorporate its proprietary technologies and components by deducting amounts reflecting the additions from the price used to calculate the royalties.

A few months after the initial suit was filed, MIT leveled a new charge at Dharmacon, stating that the company was infringing 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).

In October, however, MIT voluntarily dropped its patent-infringement allegation, leaving only the licensing dispute outstanding.

— Doug Macron ([email protected])

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