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Nucleonics Challenges Benitec s US Patent; Sets Sights on Other Patents

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Nucleonics fired another shot aimed at Benitec' patent portfolio this week, asking the United States Patent and Trademark Office to re-examine Benitec' sole US patent.

This follows a similar filing by Nucleonics last month in Australia, when the company asked the commissioner of patents in that country to re-examine one of the patents Benitec holds there (see RNAi News 9/10/2004).

The backdrop for this IP challenge is Benitec's ongoing patent litigation with Nucleonics: In April, Benitec filed a lawsuit charging that Nucleonics, Ambion, and GenScript infringed its US patent entitled "Genetic Constructs for Delaying or Repressing the Expression of a Target Gene (see RNAi News 4/2/2004).

In both re-examination requests, Nucleonics cited prior art — which can be scientific or technical literature, or other patents — that the patent office had not considered when it first examined Benitec' patent application. "Our belief is that in both cases we have provided sufficient information to invalidate all claims in both of the patents, Nucelonics CEO Robert Towarnicki told RNAi News this week, adding that the documents will be publicly available in about a month. "We think we have a very high likelihood of success.

This might be an over-optimistic assessment: According to patent office statistics, rarely are all claims struck down on re-examination. Most of the time, the patent scope is narrowed, which may or may not qualify as success for Nucleonics.

Re-examination requests, in general, are rare. Last year, the USPTO issued nearly 190,000 patents but had fewer than 400 re-examination requests. Once a request has been made, it has a good chance to proceed: The patent office agreed to re-examine almost all of the patents challenged.

In almost two-thirds of cases, at least one of the claims was changed, usually narrowed. In almost a third of the re-examinations, all of the claims were upheld, and in 10 percent of cases, all the claims were canceled.

Re-examinations can only be requested on the basis of prior art. Neither the utility of a patent nor whether the patent sufficiently discloses the invention can be challenged in this way.

"People don't usually request [re-examinations] unless they really believe they have prior art that does indeed meet the legal test, Brigid Quinn, a USPTO spokeswoman, told RNAi News. "To find qualifying prior art is a fairly high bar.

In addition, the requesting party has to pay for the re-examination, which costs between $3,000 and $9,000, depending on the type.

The process works as follows: If someone — either the patent holder, a third party, or the director of the patent office — finds prior art that "raises a substantial new question of patentabililty, they can bring it to the attention of the USPTO. If the office decides to grant the request — which it usually does within a matter of weeks, according to Quinn — the patent "goes through the whole examination process again, but only looking at it from the point of view of the prior art, she said. A different examiner is put on the case than the one who reviewed the patent application initially.

On average, the patent office completes a re-examination within 21 months. The patent holder, and in some cases the initiating third party, can then rebut the examiner' finding.

A third party can request two types of re-examinations, depending on how much they want to stay involved in the process. In an ex parte re-examination, which is the most common and costs approximately $3,000, the third party ceases to actively participate once it has submitted the additional prior art, although it will be notified of the results.

In an inter partes re-examination — which costs $8,500 to $9,000 — the third party is able to challenge the patent office' findings, but it is precluded from raising certain issues with the patent later, for example in court, if it has not raised them during the re-examination process. Though an inter partes re-examination is somewhat riskier, Nucleonics has taken this route.

Though a re-examination is a road less traveled, "it' not a bad route to go, Richard Warburg, an IP lawyer and partner of Foley & Lardner, said. Patent examiners, he told RNAi News, are pressed hard for time when they review a patent application — in the biotechnology area, they only have 18 hours — and thus might overlook a crucial document.

"It' not infrequent they won't find the best piece of prior art, he said. However, he acknowledged that the process is "more in favor of the patent surviving, albeit in a narrowed form.

Whatever the outcome in Australia and the US, Nucleonics is not going to stop here. "We think that [Benitec'] patent portfolio is flawed, and we are going to continue to challenge their IP around the world, Towarnicki said. The company will probably pursue Benitec' other Australian patents, he said, and will look into the legal avenues available for patent challenges in the UK, where Benitec recently had a patent issued.

John McKinley, CEO of Benitec, through a spokesperson, declined to comment.

— JK

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