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Law Firm Says New CSHL Claims Against it are Unrelated to Ongoing Suit

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By Doug Macron

Law firm Ropes & Gray last week responded to the recent conflict-of-interest charges levied against it by Cold Spring Harbor Laboratory as part of ongoing litigation, claiming that its dealings with three other companies working in the RNAi space have no bearing on the case at hand.

Rather, the new allegations are an attempt by CSHL to delay a ruling on the dismissal of the lawsuit so that the lab can review the companies' confidential materials, Ropes & Gray stated.

In proposed amendments to its original complaint against Ropes & Gray, CSHL alleges that former Ropes & Gray attorney Matthew Vincent included certain of the institute's intellectual property into a patent application filed by Arrowhead Research subsidiary Insert Therapeutics, which was later merged into another Arrowhead company, Calando Pharmaceuticals.

It also claims that Vincent, who was disbarred in Massachusetts late last year over allegations that a company he created inappropriately billed his law firm, improperly represented CSHL and RXi Pharmaceuticals at the same time.

In a response filed last week with the US District Court for the Eastern District of New York, Ropes & Gray stated that CSHL's new charges do not relate to its "core claim of legal malpractice" and fail to demonstrate "the existence of any conflict of interest."

Rather, the research institute claims "the new allegations appear to be designed to delay resolution of [Ropes & Gray's] pending motion to dismiss [the case] and to justify a fishing expedition for discovery about [the firm's] other clients' confidential and privileged materials and communications."

The legal dispute began in February when CSHL sued the law firm and Vincent for allegedly improperly prosecuting US two patent applications — Nos. 20040018999, filed May 16, 2001, and 20020162126, filed May 24, 2001 — that cover 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.

According to CSHL, Vincent further concealed his actions and, by the time the situation came to light, the applications had already been "unfairly prejudiced," leading to their rejection by the US Patent and Trademark Office.

CSHL claims 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.

In response, Ropes & Gray asserts that the patent applications were rejected because of inventions of researchers other than Fire and Mello. In April, the law firm asked for CSHL's suit to be dismissed (GSN 4/5/2010), a move the research institute opposed weeks later (GSN 4/29/2010).

Before the court hearing the case could rule on the motion to dismiss, however, CSHL proposed introducing additional allegations into its complaint, namely that Vincent "co-opted" Hannon's shRNA inventions and included them in a patent application he filed for Insert in 2002.

Vincent, a co-founder of Calando, "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 institute added.

Further, in 2007, Vincent inappropriately took on work from RXi Pharmaceuticals, CSHL said. 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).

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

In regards to the Insert allegations, Ropes & Gray noted in a court filing last week that the application prepared by Vincent in 2002 "was directed to a method of delivering certain RNAi molecules to tissues of interest … while the Hannon applications are directed to using short hairpin RNA in mammalian cells to obtain" an RNAi effect.

The Insert application "could not have 'co-opted' … Hannon's alleged invention" since it doesn't aim to protect shRNAs or their use in mammalian cells, the law firm stated. At the same time, CSHL "confirms that … Hannon was aware of the technology in the Insert application but does not allege that he ever complained about it … which renders implausible any suggestion that the application 'co-opted'" Hannon's own inventions.

Additionally, CSHL states that Vincent contacted Hannon about "possible ventures" between the institute and Insert. "If … Vincent had in fact co-opted … Hannon's invention for the benefit of Insert … Hannon would have been the last person he would approach about a joint venture involving those applications."

As for the proprietary of Vincent's relationship with the Arrowhead subsidiaries, Ropes & Gray states that CSHL "tellingly does not … allege that this relationship conflicted with [its own] interests," and cannot allege that Hannon was unaware of the relationship.

The RXi allegations, meantime, "create a misimpression of a conflict" where none exists, Ropes & Gray stated.

Specifically, they do not allege that Ropes & Gray represented the company or CSHL simultaneously in connection with their 2007 licensing deal, that the law firm ever represented the company "in prosecuting a patent application based on information obtained from CSHL … or indeed that any problem of any type ever arose from the situation," it noted.

As a founder of RXi and member of the drug developer's scientific advisory board, Hannon likely was aware of its relationship with Ropes & Gray and Vincent, "with whom he had a long-term working relationship.

"Stripped of the unsupported innuendo, the sum of CSHL's new allegations concerning RXi is that [Ropes & Gray] acted as RXi's patent prosecution counsel at the same time" it was representing the institution, the law firm stated.

CSHL "does not allege this presented any conflict of interest, not does it allege any facts that would support that conclusion," it added.


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