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USPTO Again Rejects Benitec IP, But Supreme Court Declines to Rehear Nucleonics Suit

The US Patent and Trademark Office this week rejected for the fourth time all remaining claims in Benitec’s core US patent as part of ongoing patent re-examination proceedings, marking the latest setback for the Australian expressed RNAi firm.
However, the patent office’s decision on the patent, No. 6,573,099, which was made after Benitec rival Nucleonics asked the office to re-examine it, is not final. Benitec has two months to respond to the ruling.
Separately this week, the US Supreme Court denied Nucleonics’ request to re-open a patent-infringement case Benitec filed against Nucleonics in 2004. Although the case was dismissed by an appeals court at the request of Benitec, Nucleonics had been pushing to have the case reinstated in order to secure a court ruling that the ‘099 patent is invalid.
Regarding the USPTO decision, Benitec CEO Sue MacLeman said in a statement that the company is “confident that its gene-silencing intellectual property claims will be further secured through re-examination This ‘backward and forwarding’ between the patent office and the patent owner is usual in high-profile IP cases.”
Benitec also said that it intends to “rigorously respond” to the patent office “as we believe [the patent examiner] has misinterpreted the science and the state of the art at the time our patent was filed. If we do not get resolution with this examiner … the company does have the ability to file an appeal with the USPTO Appeals Board.”
But Nucleonics viewed the patent office’s rejection of the patent claims as a victory.
“Nucleonics remains confident in its freedom to operate and expects [a final USPTO] action to be consistent with the patent office findings to date: that all of the claims are invalid,” Nucleonics President and CEO Robert Towarnicki told RNAi News in an e-mail this week.
Describing the Supreme Court decision, MacLeman said that it “completes once and for all the litigation between Nucleonics … and Benitec. We can now fully focus our attention, efforts, and resources toward rebuilding Benitec and developing RNAi therapeutics.”
According to Towarnicki, the Supreme Court “has rigorously insisted that such a denial carries with it no implication whatever regarding the court’s views on the merits of a case [that] it has declined to review.
He added that “in light of the recent USPTO action, we are not overly concerned with this decision. With all remaining patent claims [in the ‘099 patent] rejected yet again, the court action may well prove irrelevant to Nucleonics.”
‘Missed the Point’
As part of its ruling this week, the USPTO rejected claims in the ‘099 patent that had not already been canceled by Benitec in light of a number of examples of prior art, including US patent No. 5,578,716, which was granted in 1996 to McGill University researcher Moshe Szyf.
The ‘716 patent covers “tumorigenicity-inhibiting antisense oligonucleotide sequences complementary to mRNA or double-stranded DNA that encodes mammalian DNA methyl transferase,” as well as “methods for inhibiting tumorigenicity and [a] pharmaceutical composition [that] comprises the tumorigenicity-inhibiting antisense nucleotide,” according to its abstract.
In rejecting the ‘099 patent, the patent office also pointed to World Intellectual Property Organization patent 97/11170, which was awarded to Paul Zamecnik at the Worcester Foundation for Biomedical Research.
According to that patent’s abstract, it covers “methods of selectively inhibiting the growth of or killing prostatic cells, using antisense oligonucleotides to prostate specific genes. … The oligonucleotides may have natural nucleic acid structures or may be modified oligonucleotides with enhanced stability or tissue specific targeting.”

“In light of the recent USPTO action, we are not overly concerned with [the Supreme Court’s] decision. With all remaining patent claims [in the ‘099 patent] rejected yet again, the court action may well prove irrelevant to Nucleonics.”

According to the USPTO, the claims of these patents teach “a genetic construct containing an oligonucleotide comprising a promoter and two substantially identical copies of a target gene region in sense and antisense orientation separated by a stuffer fragment [that] forms a stabilized dsRNA oligonucleotide (hairpin) in an animal cell to inhibit the expression of a target gene,” which anticipates all of the remaining claims in the ‘099 patent.
According to Benitec, the patent office examiner reviewing the ‘099 patent “has not accepted the company’s arguments in respect to the Zamecnik and Szyf references. We believe the examiner has missed the point here as these references relate to ribozymes and oligonucleotides that differ from and don’t have the elements of” the company’s expressed RNAi approach.
Benitec did score a victory in the patent re-examination process when the USPTO accepted its arguments that certain aspects of the ‘099 patent were not unpatentable in light of US patent No. 6,506,559 — the so-called Fire/Mello patent that is widely viewed as the RNAi field’s most fundamental piece of IP.
That patent claims a process of introducing an RNA into a living cell to block expression of a target gene.
”The RNA has a region with double-stranded structure,” the ‘559 patent’s abstract states. “Inhibition is sequence-specific in that the nucleotide sequences of the duplex region of the RNA and of a portion of the target gene are identical.”
Benitec noted that the patent examiner did not accept the company’s offer of evidence showing “conception of certain aspects of the invention [covered by the ‘099 patent] before the December 1997 filing date” of the Fire patent.
The company added that it intends to supplement its evidence “to clarify its conception of these aspects prior to the … filing date of Fire.”
To Nucleonics’ Towarnicki, however, Benitec’s success in overcoming the Fire prior art claims “relates only to [the company’s] dual-promoter constructs having a promoter-sense sequence and a separate promoter-antisense sequence.
“Even if Benitec were able to successfully argue the non-obviousness of such constructs over Fire, it wouldn’t impact Nucleonics or likely anyone else as this type of construct is highly inefficient for the creation of siRNAs and would never be utilized commercially.”
MacLeman told RNAi News in an e-mail this week that the company understands it has “more work to do on the re-exam” and intends to “argue further” its case against the examples of prior art at issue.
Fight or Flight
The dispute between Benitec and Nucleonics began in 2004 when Benitec sued three firms — Nucleonics, Ambion, and GenScript — for allegedly infringing the ‘099 patent, which essentially claims the gene-expression knockdown using DNA that transcribes double-stranded RNA (see RNAi News, 4/2/2004).
Although Ambion and GenScript licensed the patent to end the litigation, Nucleonics chose to fight. As part of its legal strategy, Nucleonics sought a court ruling that Benitec’s ‘099 patent was invalid, and either opposed the patent or requested re-examinations of Benitec’s IP in several nations, including the US.
By 2005, the USPTO had rejected all claims in the ‘099 patent, and Benitec filed a number of responses to the office attempting to address the issues that led to the rejection, most recently in April 2007. Meanwhile, the patent-infringement lawsuit made its way through the courts.
Around the time of the USPTO’s rejection, and amid investor and board member concerns over how the litigation was affecting the company's image and pocketbook, Benitec ousted CEO John McKinley and replaced him with COO Sara Hall (see RNAi News, 1/21/2005).
Under Hall, Benitec managed to have the Nucleonics lawsuit dismissed, but Nucleonics continued to push to have the case reinstated so it could obtain a court ruling on the validity of the ‘099 patent (see RNAi News, 3/16/2006).
Ultimately, a US Federal Court of Appeals rejected Nucleonics’ request (see RNAi News, 7/26/2007). This week, the US Supreme Court declined to hear the case, leaving Nucleonics no further options for re-opening the litigation.
But the damage to Benitec has already been done. By mid-2006, the company had shuttered its US operations and cut most of its staff, including Hall (see RNAi News, 6/29/2006). Additionally, recent fund-raising efforts by the restructured company have failed (see RNAi News, 9/14/2006 and 4/5/2007).
Now, with the latest USPTO rejection of the ‘099 patent, Benitec faces the possibility that a key value-driver will be invalidated.

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