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USPTO Rejects Claims of Two Helicos Patents in Ongoing IP Dispute with PacBio

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By Monica Heger

This article has been updated from a version posted April 1 to include additional information from USPTO documents and to clarify the USPTO's action.

Helicos Biosciences disclosed last week in documents filed with the US Securities Exchange Commission that the US Patent and Trademark Office has rejected all claims of two of its patents named in an ongoing intellectual property dispute with Pacific Biosciences.

Additionally, the company reported that despite a 47 percent increase in 2010 revenues driven by a boost in grant funding, its current financial resources "raise substantial doubt" about its ability to continue.

Helicos, which announced in October that as part of a strategy shift it would focus on enforcing its intellectual property, is involved in an ongoing patent dispute with Pacific Biosciences, Illumina, and Life Technologies regarding alleged infringement of four of its patents: US Patents No. 7,645,596; 7,037,687; 7,169,560; and 7,767,400. The three firms have responded with a countersuit (IS 12/21/2010).

In its annual report, Helicos disclosed that in January, PacBio submitted a request to the USPTO for inter partes reexamination of all four patents and is seeking a determination that one or more of the claims of those patents are invalid.

On March 10, the USPTO issued office actions rejecting all claims of the '400 and '596 patents, the company disclosed.

According to documents by the USPTO, the 32 claims of patent '400, which cover a method for generating paired reads, were rejected on the grounds that the invention had been previously described or patented and also on the grounds that the invention would have been obvious or common knowledge to someone skilled in the subject.

The majority of the claims in that patent were rejected based on a previous patent application by Swerdlow, which describes a method for "pairwise sequencing of a polynucleotide template," resulting in two distinct and separate regions of the template. The additional claims were rejected according to Swerdlow and in additional consideration of patent applications by Metzker, Turner, Lutz, Sutherland, and Rigatti.

The eight claims of patent '596, which cover a sequencing-by-synthesis method using labeled nucleotides, were also rejected. For each of the specific claims in the patent, the USPTO found either, that the claim had previously been published, or that based on previous publications, the claim would have been obvious to one skilled in the art. Specifically, the USPTO cited documents by Rabani, Rosenthal, Garland, and Hyman.

Helicos has two months to respond to the action. The Patent Office has not yet acted on requests by PacBio, Illumina, and Life Tech to reexamine Helicos' '687 and '560 patents, however, a trial date has been set for Sept. 10, 2012.

Also in its annual report, Helicos reported $4.4 million in revenues for 2010, compared to $3 million in 2009.

The revenue increase was due to a substantial jump in grant revenue to $3.1 million from $700,000 in 2009. In October, the company was awarded three federal grants under the Qualified Therapeutic Discovery Project related to developing molecular diagnostics. In addition, it received grants to develop methods to sequence DNA and RNA at the attomole level, a grant to develop methods to sequence RNA directly, as well as a grant for its participation in a sequencing study on Ewing's sarcoma.

Helicos' 2010 product revenue, meantime, fell to $1.3 million from $2.3 million in 2009. The company sold one HeliScope instrument in 2010 and two instruments in 2009. It also has $7.2 million in deferred revenue relating to the sale of six instruments for which all revenue recognition criteria have not been met.

As of Dec. 31, 2010 and March 24, 2011, the company had $2.5 million and $2.9 million, respectively, in cash and cash equivalents.

In its annual report, the company reiterated its shift in strategy, announced last October, to defer the development of a CLIA certified lab and to instead focus on enforcing its intellectual property, pursuing license agreements, and seeking partnerships with companies interested in next-generation sequencing and in the molecular diagnostics field (IS 10/19/2010). It has not only stopped production of its HeliScope machine, but halted efforts at selling the instruments, and said it did not "foresee commencing any efforts to sell new instruments."

Last year, the company secured a bridge loan worth up to $4 million, which has enabled it to continue operations into 2011 (IS 11/30/2010). However, Helicos said in its SEC filing that it would require additional funding in the second half of 2011, and that if it was unable to raise the necessary funds, it would need to "dramatically reduce, or even terminate all of, our operations."

Additionally the company disclosed that it is no longer able to make payments to vendors and unsecured creditors, which has caused it to "significantly scale back service support and reagent supply to our current installed base."


Have topics you'd like to see covered by In Sequence? Contact the editor at mheger [at] genomeweb [.] com.

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