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Sigma-Aldrich, Open Biosystems Discuss Settling IP Suit; Court Puts Case on Hold

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Sigma-Aldrich and Oxford BioMedica are currently engaged in “extensive” discussions with Open Biosystems about settling their ongoing patent-infringement legal battle, which has been put on hold until mid-March by the US District Court overseeing the case, according to court documents.
 
This week, the court granted the companies’ request for “a stay of the litigation in all respects, including but not limited to expert disclosures … [through] March 14, 2008, to allow settlement talks to proceed.”
 
In a joint filing this week, the three companies said that they “have been engaged in extensive settlement talks, which are continuing … [and] believe it would be most productive” to stay the lawsuit for almost two weeks so that an out-of-court settlement might be reached.
 
The disclosure comes around three months after Open Biosystems CTO Troy Moore told RNAi News that the company had twice met with Sigma-Aldrich representatives to discuss a possible settlement — once through a court-appointed mediator — but that the parties were unable to reach an agreement (see RNAi News, 11/1/2007). He added at that time that no additional settlement discussions were planned.
 
The suspension of the litigation also comes about one week after the court partially granted Open Biosystems additional time to respond to a motion by co-plaintiffs Sigma-Aldrich and Oxford BioMedica seeking a patent-infringement ruling before the case goes to trial.
 
As reported by RNAi News, in January Sigma-Aldrich and Oxford BioMedica asked the court to rule definitively in advance of a trial that Open Biosystems infringes one of the Sigma-Aldrich-controlled patents at the heart of the lawsuit (see RNAi News, 1/31/2008). The request came after a high-profile RNAi researcher, Duke University’s Bryan Cullen, testified that certain Open Biosystems products infringe the patent in question.
 
Earlier this month, Open Biosystems asked the court for additional time to respond to the co-plaintiffs’ motion for the infringement ruling, arguing that it has not had the opportunity to depose either Cullen or the inventors of the disputed intellectual property.
 
Open Biosystems’ response was originally due by the end of this week, but last week the court extended to March 7 Open Biosystems’ deadline to respond to the co-plaintiffs’ motion for an infringement ruling — two weeks less than the company had requested.
 
According to the court, although a deposition of Cullen “appears relevant to the formulation” of a response to the motion … [Open Biosystems’] response is not due until at least seven days after [Cullen’s] deposition … and therefore [the company] will have the benefit of that deposition in responding” to the motion for an infringement judgment.
 

The companies “have been engaged in extensive settlement talks, which are continuing … [and] believe it would be most productive” to stay the lawsuit until March 14.

Open Biosystems further failed to demonstrate how facts obtained from its deposition of the IP’s inventors would be “relevant to opposing the motion,” the court said.
 
“The court therefore finds that Open [Biosystems] has failed to meet its burden to establish why it cannot respond to the [Sigma-Aldrich and Oxford BioMedica] motion and how a postponement of a ruling will enable it to rebut” the plaintiffs’ charges of infringement, the court ruled last week.
 
Still, Open Biosystems was granted the March 7 extension in order to “review and analyze the transcript of [Cullen’s] deposition for use in the preparation of its response,” according to the court.  
 
In the end, however, Open Biosystems may not need the extension.
 
The legal wrangling between the companies 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 technology covered by the patents — Nos. 6,924,123 and 7,056,699 — comprises a lentiviral long terminal repeat-deleted vector “capable of transducing non-dividing and/or slowly dividing cells,” and involves “retroviral vectors based on the lentivirus family of viruses," including HIV-1, according to Sigma-Aldrich.
 
In their lawsuit, the co-plaintiffs contend that numerous Open Biosystems products, including its RNAi Consortium shRNA lentiviral library and its shRNAmir libraries, infringe this IP.
 
In October, Sigma-Aldrich and Oxford BioMedica achieved a key victory when the court hearing the case accepted their definition of an “LTR-deleted vector” to mean ”a replication-defective vector based on a lentivirus” that lacks nucleotide sequences required for transcription but still maintains those sequences necessary for reverse transcription and integration.
 
Open Biosystems had asked the court to interpret the term as “a lentiviral vector in which a certain portion of the long terminal repeat (an identical sequence of nucleotides at either end of the vector), including the entirety of the section known as the R region, are removed and substituted with non-lentiviral or heterologous sequences.”
 
Based on the court’s acceptance of their definition, Sigma-Aldrich and Oxford BioMedica made their request for a ruling that Open Biosystems infringes these ‘699 patent prior to a trial.
 
All the while, Open Biosystems has maintained that the litigation is an example of a large company attempting to use its financial leverage to squeeze a rival out of the marketplace. In June 2006, when the suit was first filed, Open Biosystems CTO Troy Moore told RNAi News that “we feel like we're being targeted by this multi-billion-dollar corporation that says, 'We can keep hitting you with lawsuits to force you out of this market’ (see RNAi News, 6/15/2006).
 
"I think [they are suing us] because we are kind of disrupting the marketplace," Moore said at the time. "Our goal with Open Biosystems is to make these technologies available to everybody — academic, government, industry. We've been doing that very successfully" while still honoring other organizations' IP.
 
“Commercial groups are starting to take notice [of this], and I think that's challenging their way of thinking — it's not the normal business model," he added.

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