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As RNAi Field Matures, Its Landscape Bears Scars of Past, Present Litigation

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Although Nucleonics’ ongoing litigation with two of its co-founders is perhaps the RNAi industry’s most dramatic legal row given its charges of scientific misconduct and fraud (see RNAi News, 7/3/2008), it is just one of several legal battles in the gene-silencing technology’s short history.
 
One of the earliest cases appeared in early May 2002 when antisense pioneer Isis Pharmaceuticals sued privately held reagent shop Sequitur for allegedly infringing four US patents covering the use of antisense molecules to inhibit specific gene targets.
 
Sequitur is best remembered for its Stealth RNAi molecules, a line of modified siRNAs designed to avoid interferon responses that were key to the company’s 2003 acquisition by Invitrogen (see RNAi News, 11/6/2003). But at its start, the company focused on using antisense for both research and therapeutic applications, which put it in direct competition with Isis.
 
According to the Isis suit, Sequitur allegedly infringed US patent No. 5,959,097, which covers antisense modulation of MEK2; No. 5,958,773, which covers antisense modulation of Akt-1; No. 6,043,090, which covers antisense modulation of human Akt-2; and No. 6,096,543, which covers antisense modulation of human MEK1.
 
Sequitur denied the infringement charges, and the companies settled their dispute less than five months later through a licensing agreement, the terms of which were not disclosed.
 
Allegations of patent infringement between two different companies triggered another legal row about two years later when Benitec sued GenScript, Ambion, and Nucleonics in a move that would prove to be the Australian expressed RNAi shop’s undoing.
 
In April 2004, Benitec sued the three companies for allegedly infringing its core US patent, No. 6,573,099, which claims gene-expression inhibition using DNA that transcribes double-stranded RNA (see RNAi News, 4/2/2004). The suits came just months after Benitec’s then-Chairman and CEO John McKinley told RNAi News that the company was planning to sue several companies if they failed to license the ‘099 patent (see RNAi News, 1/30/2004).
 
Although GenScript and Ambion licensed the ‘099 patent, Nucleonics decided to fight, seeking a court ruling that Benitec’s intellectual property was invalid and opposing or requesting re-examination of certain Benitec patents in the US and abroad.
 
By 2005, the US Patent and Trademark Office had rejected all the claims within the ‘099 patent, and amid concerns over how the lawsuits were affecting the company's image and pocketbook, Benitec ousted McKinley (see RNAi News, 1/21/2005).
 
Benitec’s new leadership worked to end the litigation and put the company back on track as a drug developer, but the damage was done. Although Benitec was able to successfully petition the court to dismiss its suit against Nucleonics (see RNAi News, 8/5/2005), Nucleonics pressed for reinstatement of the litigation in order to obtain a final ruling on the ‘099 patent. By early 2006, Benitec was forced to shutter its US operations and cut virtually all its staff (see RNAi News, 6/29/2006).
 

Benitec achieved a small victory when Nucleonics’ efforts to revive the patent suit ended with a rejection by the US Supreme Court. Still, the USPTO recently rejected the ‘099 patent for the fourth time, and while the rejection isn’t final, it suggests that Benitec’s key piece of IP may not survive without significant claim amendments.

Restructured as a much smaller firm headquartered in its native Australia, Benitec achieved a small victory when the US Supreme Court rejected Nucleonics’ efforts to revive the patent suit (see RNAi News, 4/24/2008). Still, the USPTO recently rejected the ‘099 patent for the fourth time, and while the rejection isn’t final, it suggests that Benitec’s key piece of IP may not survive without significant claim amendments. 
 
IP rights were also the key issue in mid-2006 when Sigma-Aldrich and partner Oxford BioMedica sued Open Biosystems.
 
In their lawsuit, they charged that Open Biosystems’ RNAi Consortium shRNA lentiviral library infringed US Patent Nos. 6,924,123 and 7,056,699, which claim lentiviral vectors that can be used to introduce RNA into slowly dividing and non-dividing cells.
 
The patents were issued to Oxford BioMedica, which licensed them exclusively to Sigma-Aldrich in 2005.
 
During the course of the litigation, representatives of Open Biosystems maintained in both legal filings and in interviews with RNAi News that Sigma-Aldrich’s legal maneuverings were no more than an attempt by a large corporation to wear down a smaller competitor (see RNAi News, 6/15/2006 and 12/13/2007).
 
After almost two years, the companies eventually worked out their differences through a licensing deal in which Open Biosystems took undisclosed rights to IP held by Sigma-Aldrich and Oxford BioMedica for use in research activities (see RNAi News, 3/13/2008). The companies also agreed to drop all claims against each other, and the court found that the ‘123 and ‘699 patents were valid and enforceable.
 
Less than four months later, Open Biosystems was acquired by Thermo Fisher Scientific (see RNAi News, 7/3/2008).
 
Dues and Don’ts
 
Though often a source of disagreement in the biotech world, patent rights were not the basis for every lawsuit in the RNAi field.
 
In early 2005, the Massachusetts Institute of Technology sued Dharmacon for failing to pay sufficient royalties on RNAi products pursuant to a 2001 agreement under which the RNAi shop obtained co-exclusive access to certain siRNA technology for internal research or for the sale of research products (see RNAi News, 2/11/2005).
 
That IP — which was 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 Nos. 09/821,832 and 10/255,568, and PCT application No. US01/10188, and is jointly owned by MIT, the Whitehead Institute, the Max-Planck Institute, and the University of Massachusetts, although MIT is authorized to act on behalf of the other institutions.
 
According to MIT’s suit, Dharmacon was required to pay a running royalty of 7 percent of the net sales of products incorporating the patented technology, including siRNAs. However, Dharmacon contended that it should have been permitted to pay a reduced royalty on products that incorporate its own proprietary technologies and components by deducting amounts reflecting the additions from the price used to calculate the royalties.
 
A few months after the suit was filed, MIT added claims of patent infringement, but it later dropped these allegations. By early 2006, Dharmacon and MIT reached an out-of-court settlement to end the litigation (see RNAi News, 1/5/2006). Details of the settlement were not disclosed, but a Dharmacon official told RNAi News at the time that the arrangement did not affect the company’s license to the RNAi IP.
 
An alleged failure to meet contractual obligations was also part of a lawsuit Sirna Therapeutics filed against one-time partner Protiva Biotherapeutics in 2006 in which the RNAi drug developer said that Protiva out-licensed a drug-delivery technology it didn’t own.
 
Specifically, in 2005 Protiva licensed its stable nucleic acid lipid particle, or SNALP, technology to Sirna. But in its suit, Sirna said that it later discovered the rights to SNALPs for RNAi applications belonged to Inex Pharmaceuticals, the one-time parent of Protiva.
 
In response, Protiva sued Sirna, charging the RNAi drug developer with maintaining a “hidden agenda” to develop its own siRNA delivery technology using Protiva's proprietary technologies and know-how (see RNAi News, 3/30/2006).
 
The legal wrangling later expanded when Protiva sued Inex for stating to people in the RNAi industry that Protiva did not control intellectual property related to the use of SNALPs for RNAi — talk that Protiva said killed the deal with Sirna and damaged licensing talks with other companies.
 
After Merck acquired Sirna, it took a non-exclusive license to the SNALP technology in order to settle the litigation (see RNAi News, 10/18/2007). But the war between Protiva and Inex, which later restructured into Tekmira Pharmaceuticals, continued until this year when the companies agreed to merge and drop all charged against each other (see RNAi News, 4/3/2008).
 
Most recently, Opko Health has been named a defendant in two separate lawsuits in the short time since it was established in early 2007 through a three-way merger that included Acuity Pharmaceuticals (see RNAi News, 3/29/2007).
 
In the first, the company was sued last November by non-profit economic-development organization Ben Franklin Technology Partners of Southeastern Pennsylvania for allegedly breaching a contractual obligation requiring it to pay the non-profit more than $800,000 worth of stock warrants if one of its business components was to move out of the state before an agreed-upon date (see RNAi News, 11/29/2007).
 
Opko allegedly inherited the obligation from Acuity, which had been awarded research and development funding by BFTP-SEP in exchange for stock and warrants. The case was resolved out of court early this year (see RNAi News, 2/7/2008).
 
In the second lawsuit, Opko was charged with conspiring with one of its former executives to illegally interfere with the business activities of a rival ophthalmic technology firm in order to acquire ocular imaging systems firm Ophthalmic Technologies (see RNAi News, 5/22/2008).
That case is still ongoing.

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