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As MIT, Dharmacon, and Fisher Butt Heads on Scheduling, Court Orders Dates and Mediation

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It appears that royalty payments and patent rights aren't the only things on which the Massachusetts Institute of Technology and Dharmacon can't agree.

As MIT's breach-of-contract and patent-infringement suit against Dharmacon and its parent company Fisher Scientific moves forward, the parties have been unable to resolve a number of scheduling matters (see table). As such, the US District Court for the District of Massachusetts has handed down a discovery and trial schedule for the litigants.

Anatomy of an RNAi Lawsuit
Discovery/Motion Deadline Plaintiff's Proposal Defendant's Proposal Court's Order
Mediation Fall 2005
Final Pre-Trial Conference Aug. 1, 20066 Nov. 1, 2006 Feb. 21, 2006; bench trial on breach-of-contract dispute on Feb. 27, 2006
Markman Hearing
(if necessary)
Jan. 23, 2006, or at the court's convenience April 17, 2006, or at the court's convenience Nov. 15 & 16, 2005
Close of All Discovery April 30, 2006 June 30, 2006 Dec. 31, 2005 on breach-of-contract dispute; May 31, 2006 on patent dispute

Additionally, the court has determined that MIT and the companies should try to hash out their differences out of court, and has referred the case to mediation for the fall.

The development is the latest in an ongoing legal battle between the companies and the institution. The row came to light in January when 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.

A few months later, MIT amended its suit against Dharmacon and Fisher 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).

In recent months, Dharmacon has sought to have the case dismissed and Fisher has filed a motion to have the charges against it dropped (see RNAi News, 6/3/2005). MIT has filed its own motions to keep the suit moving forward and retain Fisher as a defendant.

Although the US Disctrict Court ordered the litigants to set a schedule for the case, a joint statement filed by MIT, Dharmacon, and Fisher dated July 8 indicates that the parties have been unable to do so.

MIT said in the statement that "by agreement, the parties have agreed that MIT's claims for breach of the license agreement may be tried to the bench. These claims are far less complex than those involved in the patent case … and MIT proposes … a six-month schedule to a bench trial on its contract claims … and then a one-year schedule to a jury trial on its patent claims."

MIT also proposed that the breach-of-contract portion of the lawsuit be combined with a so-called Markman hearing -- a mini-trial of sorts during which the meaning and scope of a patent claim is defined.

"The discovery schedule proposed by MIT is an efficient and sensible approach designed to address the procedural requirements necessary to adjudicate both the breach-of-contract claims and the patent-infringement claims in a timely manner," MIT added in its portion of the joint statement.

Meanwhile, in the statement Dharmacon and Fisher assert that since "MIT has added an unrelated patent-infringement claim essentially on information and belief without alleging any specifics concerning the accused technology … Dharmacon anticipates [that this claim] may be the subject of early summary judgment disposal."

The defendants noted in the statement that "MIT waited nearly three months before filing an amended complaint" and serving it. "Now, MIT oddly presses the court on a brief six-month discovery schedule for the breach-of-contract claim. Such an expedited schedule is inappropriate for this case," they stated.

Since fact discovery related to MIT's breach-of-contract claims will involve a number of steps, including a review of the negotiations leading up to the license deal and a review of the siRNA research and development conducted by all parties, as well as "expert reports and depositions," Dharmacon and Fisher stated that "a truncated discovery period would not afford the parties sufficient time for the discovery needed to fairly adjudicate the claims and counterclaims."

In the end, the court ordered much tighter deadlines than either the defendants or plaintiff had suggested.

MIT had proposed that all discovery end on April 30, 2006, while Dharmacon and Fisher had suggested June 30, 2006. The court placed a deadline of Dec. 31, 2005, on the breach-of-contract discovery, and a deadline of May 31, 2006, on the patent case fact discovery.

While MIT had envisioned a Markman hearing, if necessary, occurring on Jan. 23, 2006, and Dharmacon and Fisher suggested April 17, 2006, the court ordered the hearing to occur on Nov. 15 and 16, 2005.

MIT had proposed that all pre-trial conference be wrapped up by Aug. 1, 2006. Dharmacon and its parent proposed Nov. 1, 2006. The court, however, ordered a final pre-trial conference on the contract dispute for Feb. 21, 2006, and a bench trial on the contract case for Feb. 27, 2006.

However, this scheduling may be moot in the end. The court also found, "after consultation with counsel, and after consultation with the various alternative dispute resolution (ADR) programs available," that the legal dispute is "appropriate for ADR." As such, the court has set mediation for the fall.

No exact date for the mediation was provided in court documents.

-- Doug Macron ([email protected])