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Open Biosystems Asks Court to Deny Sigma Request for Shareholder, Sales Information

Open Biosystems this week asked a US District Court to deny requests for financial information, including the identities of its major shareholders, made by Sigma-Aldrich last month as part of the companies’ ongoing patent-infringement dispute.
The request, which also includes sales figures for products not directly related to the row, marks the latest in a series of attempts by Open Biosystems to block what it has characterized as “overly broad” demands for information by Sigma-Aldrich during the evidence-discovery process.
Since Sigma-Aldrich first sued Open Biosystems in June 2006, the companies have been at loggerheads over what information the life sciences giant is entitled to request from its smaller rival. Part of that wrangling included an attempt by Sigma-Aldrich in November to compel Open Biosystems to produce certain corporate information.
In a separate court filing supporting its motion this week, Sigma-Aldrich noted that the companies managed to narrow their dispute to the identities of individuals or organizations holding a greater than 5 percent stake in Open Biosystems, as well as all of Open Biosystems’ sales figures and product invoices for 2005 through November 2007.
Sigma-Aldrich said it needs this information to establish Open Biosystems’ commercial success since the lawsuit was filed in light of a countersuit Open Biosystems filed claiming unfair competition and economic interference.
Additionally, Sigma-Aldrich said the information will allow it to assess the damages caused by Open Biosystems’ alleged patent infringement and to prepare for an upcoming deposition of various Open Biosystems’ executives.
In an attempt to thwart Sigma-Aldrich’s request, Open Biosystems said this week that it has already provided the company with all relevant sales information. Further, Open Biosystems stated that it should not be forced to hand over sales data on products not at issue in the lawsuit or to reveal the names of its shareholders.
Intimidate and Harass
According to Open Biosystems, Sigma-Aldrich had previously agreed that it would limit its financial information requests to Open Biosystems’ tax returns for 2004 through 2006, its profit-and-loss statements for 2005 through 2007, its balance sheets for 2005 through 2007, and various projections for products covered in the lawsuit.
In this week’s filing, Open Biosystems said that it produced these documents, thus “resolving all disputes under [Sigma-Aldrich’s] motion to compel except for the 5 percent ownership issue.”
In the filing, Open Biosystems said that Sigma-Aldrich “has never requested, through document request or interrogatory, documents showing each and every sale of all products … sold by Open [Biosystems]. Yet now, Sigma improperly seeks to compel such documents it never previously requested.”
Open Biosystems added that even if Sigma-Aldrich had followed the proper procedure to obtain the sales information, such a request would be “entirely irrelevant” to the issues in this lawsuit.
Open Biosystems said it has “already given comprehensive sales information regarding the accused products” to Sigma-Aldrich. “Requesting all of Open [Biosystems’] sales of non-accused products is simply harassment.”
Open Biosystems also labeled as harassment Sigma-Aldrich’s request for the identities of the people and entities holding more than five percent of its equity.
Sigma-Aldrich “initially contended it needed this information to know ‘the interest and bias of any witness in the case,’” Open Biosystems said in its latest filing. “Although Open [Biosystems] believes that disclosure of this information generally is not relevant, [it] offered a compromise proposal to identify, prior to a scheduled deposition, whether a witness … had more than a five percent ownership interest in the company.”
Open Biosystems said that Sigma-Aldrich rejected this offer “even though it directly addressed [its] concern regarding bias. Apparently, [Sigma-Aldrich] wants to know the ownership interest of any investor in [Open Biosystems], even if they are not a witness in the case.”
Sigma-Aldrich “is merely seeking to intimidate and harass Open,” Open Biosystems added.
Open Biosystems has asked the court to deny Sigma-Aldrich’s motion to compel the release of the shareholder and sales information.
Undue Burden
The companies’ legal dispute began in mid-2006 when Sigma-Aldrich and Oxford BioMedica sued Open Biosystems for allegedly infringing two US patents held by Oxford and exclusively licensed by Sigma-Aldrich (see RNAi News, 6/15/2006).
The IP includes US Patent No. 6,924,123, entitled "Lentiviral LTR-Deleted Vector,” which claims "a vector capable of transducing non-dividing and/or slowly dividing cells … wherein the vector is a lentiviral LTR-deleted vector;” and No. 7,056,699, which is also entitled "Lentiviral LTR-Deleted Vector” and claims inventions similar to the '123 patent.

“Open [Biosystems] has already given comprehensive sales information regarding the accused products [to Sigma-Aldrich]. Requesting all of Open [Biosystems’] sales of non-accused products is simply harassment.”

According to Sigma-Aldrich, the patented technology "involves retroviral vectors based on the lentivirus family of viruses," including HIV-1, and is "particularly useful for introducing RNAi molecules to slowly dividing and non-dividing cells."
The patents, which Sigma-Aldrich licensed exclusively from Oxford BioMedica in October 2005, are one plank in the intellectual property platform supporting Sigma-Aldrich's Mission shRNA library of shRNA clones.
In their lawsuit, Sigma-Aldrich and Oxford BioMedica allege that Open Biosystems' RNAi Consortium shRNA lentiviral library "comprises shRNA cloned into the HIV-1-based vector pLKO.1.”
This vector, the suit states, "contains a chimeric 5' LTR including an RSV promoter sequence [that is designed to] permit use of the vector together with a specific viral packaging system that creates infectious HIV-1-based viral particles while also providing researchers maximal biosafety."
Additionally, Open Biosystems' shRNAmir libraries — which comprise miRNA-adapted shRNAs in the lentiviral-based expression vector pCMV-GIN-ZEO and include a 5' LTR modified to include a CMV promoter sequence — include constructs that produce "viral particles capable of transducing slowly dividing or non-dividing cells."
Sigma-Aldrich and Oxford BioMedica claim that the production of such particles infringes the '123 and '699 patents.
Two months after being sued, Open Biosystems countersued, claiming that it does not infringe the intellectual property and asking the court to dismiss the case (see RNAi News, 8/3/2006). Early this year, Open amended the countersuit to accuse Sigma-Aldrich of unfair competition and economic interference (see RNAi News, 1/18/2007).)Early this year, Open amended the countersuit to accuse Sigma-Aldrich of unfair competition and economic interference (see ).
In May, Open Biosystems asked the court to block Sigma-Aldrich and Oxford BioMedica from requesting information in four categories that are “unduly vague and ambiguous, place an undue burden on Open [Biosystems], and/or are not reasonably calculated to lead to the discovery of admissible evidence” (see RNAi News, 5/24/2007).
Two months later, the court rejected Open Biosystems’ year-old request to dismiss the case, but partially denied and partially granted its request for a protective order.
Early last month, the court also rejected an Open Biosystems request to block Sigma-Aldrich from conducting a second deposition of certain of its management team (see RNAi News, 11/8/2007). That deposition process is slated to begin next week.

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