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Traversa Responds to Former Execs Bid to Block Sale of IP in Bankruptcy Proceedings

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The former Traversa Therapeutics executive looking to acquire certain of the company's assets as it proceeds through bankruptcy took steps last week to fend off a challenge to his bid for a key patent application, arguing that the one-time employee filing the challenge has no rights to the intellectual property.

“Traversa Therapeutics ... owns the entire right, title, and interest” to the application, Traversa's former CSO Curt Bradshaw told the bankruptcy court last week. Therefore, the company should be granted the right to sell it “free and clear” despite the legal objection of ex-director of chemistry Scott Petersen.

As first reported by Gene Silencing News, Traversa declared bankruptcy earlier this year after failing to secure the financing needed to continue its operations and began taking steps to liquidate its assets (GSN 5/31/2012).

Although the company was best known for its so-called PTD-DRBD RNAi delivery technology, which combines protein transduction domains linked with a double-stranded RNA binding domain, the firm had also been working on another delivery approach, called siRNN, involving direct modification of an oligo's phosphate backbone in order to mask its negative charge and facilitate its transport through the cellular membrane.

At the Tides: Oligonucleotide and Peptide Research, Technology, and Product Development conference in May, Petersen told Gene Silencing News that he had developed the siRNN technology while a researcher in the lab of University of California, San Diego, researcher and Traversa co-founder Steven Dowdy. With the bankruptcy of the company, he said at the time, he now held the full rights to the US patent application covering it.

In order to assert his claimed ownership of the application, No. 20110294869, Petersen earlier this month formally opposed Traversa's request with the bankruptcy court to sell the IP to Bradshaw, arguing that he began reducing the siRNN technology to practice two weeks before joining Traversa and that he never assigned the patent application's rights to the company (GSN 8/16/2012).

After Traversa decided to close its doors, it was planning on vacating its IP, Petersen told Gene Silencing News in an e-mail last week. Concerned that the US Patent and Trademark Office would classify the application as abandoned if maintenance fees were not paid, he said he was able to assign the IP to a holding company called LipoSciences.

“At most, Traversa holds a non-exclusive license to utilize the [siRNN] technology, but does not have any other rights,” according to Petersen's court filing.

Last week, however, Traversa responded to Petersen's claims, telling the bankruptcy court that Petersen did, indeed, assign the '869 application to Traversa and that it was only after his termination from the company that he raised his claim to ownership of the IP.

“Such an obvious subterfuge need not be tolerated by this court,” Traversa said.

According to Traversa, Petersen executed an information and inventions assignment agreement with the company when he began his employment in early 2008. “This 2008 agreement clearly spells out that anything ... Petersen invents during his employment with Traversa is Traversa’s property and ... Petersen expressly assigns all such inventions to Traversa.”

Traversa noted that it lost the 2008 agreement and in 2010 had Petersen sign another.

The company noted that the agreement provided Petersen with an opportunity to identify pre-existing inventions that would not be subject to the agreement. “Petersen identified nothing,” it said in its court filing. Meanwhile, Petersen's claim that he conceived of the siRNN technology prior to joining Traversa is “belied by all of the contemporaneous evidence,” the company argued. For instance, in his declaration to the court, Petersen lists March 20, 2008 — the date he joined the firm — as the date of conception of the invention covered by the patent application.

“Finally, if there were any doubt that Traversa and not Petersen [owns the IP in question], on February 14, 2011, Petersen executed a Confidential Separation Agreement And General Release of All Claims, releasing all claims that he had against Traversa” following his termination from the company, Traversa added. “Petersen’s present claims would be extinguished by this agreement because any claim by Petersen to rescind the 2008 … agreement or for conversion for ownership of the [IP] has been released by Petersen’s general release.”

Traversa asked the court to find that it is the owner of the disputed IP and has the authority to sell it.

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