While the RNAi space is defined by science, it takes more than good research to ultimately find success in the field. Just ask Richard Warburg, an IP attorney at San Diego-based law firm Foley & Lardner and a PhD in molecular biology.
“You may have the best science in the world,” he said in Boston earlier this week at the Nucleic Acid World Summit. But without a strong IP position, “you have nothing.”
As such, Warburg suggested that companies conduct a sort of self-directed due diligence every six to 12 months. This way, he said, they will not only be able to stay on top of their IP, making sure it is expansive enough to cover its interests and gibes with changes in business strategy, but also improve their chances of passing future pre-investment IP audits, which is particularly important in a down market. Nick Slapchuk, patent counsel for Pfizer, agrees. He noted that since it is integral for a large pharma or biotech to recoup all the expenses incurred during clinical development of a drug, they always make sure that they will be entitled to a period of exclusivity on a drug.
“If there is a patent issue,” he said, “we’re not going to go there.”
Warburg also stressed the need for companies in this burgeoning sector to claim intellectual property broadly and deeply, looking beyond the most straightforwardly patentable inventions, such as chemical structure, to less obvious areas such as crystal structure, and synthesis and treatment methodologies.
By expanding the size and scope of its IP estate, Warburg said, a company will increase its arsenal for an attack on a possible infringer, have recourse in the event one or more of its patents are invalidated, and improve its leverage during potential licensing negotiations.
Bharat Chowrira, vice president of legal affairs and patent counsel for Sirna, said that this is exactly the approach his company is taking. “As a small biotech, we believe in patenting early and patenting often,” and adding any supplemental information to the filings later on as it is gathered. These patents and patent applications, he said, can often be used as a bargaining chip to be traded in lieu of cash for needed IP held by other companies, thereby controlling costs.
Warburg also suggested companies look closely at the IP of rivals, considering its validity, as well as the potential of their own technology to infringe. While it might appear that a competitor has blocking IP, all alternatives should be considered before entering any potentially costly licensing arrangement or giving up on a technology altogether.
Freedom to operate is a tricky matter, and options may exist despite appearances. For example, Warburg pointed out that while US law bars the importation of a product of a patented method of manufacture, “methods of manufacture do not include information.” In August, a Federal court upheld a lower court ruling in the case of Bayer v. Housey, finding that Bayer’s importation of a product that was made using a screening technique patented in the US by Housey was not infringement. The term “manufacture,” as spelled out in USC 271(g), does not include information generation, the court determined.
To that end, a company that wants to, say, screen compounds using a method patented in the US but cannot afford to take a license might consider conducting its research in a nation where the technology is not patented, or at least using the threat to do so to help negotiate a lower license fee.
With the debate of RNAi IP heating up, Warburg added that it is important to remember the duty of disclosure to the patent office. He cited the action of a French patent attorney working for Rhone Poulenc Rorer, who referred to the use of “any hydroxy protecting group” in a patent application related to a method of synthesizing taxol intermediates.
The attorney had in his possession a reference from the inventors of the would-be patent that stated certain hydroxy protecting groups would not work in the method, but did not disclose this information to the patent office, Warburg said. The result? When this information later came to light, the patent was ruled to have been obtained by inequitable conduct and deemed unenforceable.
In the nascent RNAi sector, there are many uncertainties when it comes to IP, Warburg said, especially surrounding the field’s most fundamental issues. Unable to predict how all of it will shake out, the best a company can do is build up a solid IP foundation, including not only patents but trade secrets and copyrights, weigh the benefits of licensing agreements over litigation, and hope to weather the storm.