RNAi Litigation

From Case 1:09-cv-11116-PBS Document 297-3 Filed 05/04/10

The purpose for pooling: “…to create a unified joint economic interest in creating value via both patent families, while at the same time preserving the two patent families as separate entities.”

“Despite being the sole assignee of the Tuschl II applications, Max Planck Society agreed to pool royalties from licensing of the Tuschl I and Tuschl II applications under both inter-institutional agreements (although UMass was excluded from royalties collected based on therapeutic uses of the inventions, given that it was not a party to the Therapeutic Use Agreement). In my opinion, it is common practice and customary in the Industry for all academic institutions who are parties to an inter-institutional agreement to pool royalties from patent families relating to a common field, even if all of the patent families are not commonly owned, in order to align the interests of the academic institutions so that they can take into account all of the patent families covered by the agreement when making decisions as to any one of them.”

There are two joint agreements on management of the prosecution and licensing of Tuschl I and Tuschl II. Here are some key features of these two agreements.

• The first 2001 agreement is between Max-Planck, MIT, Whitehead, and UMass.
• This agreement distinguishes Tuschl I from Tuschl II as the “joint invention” versus the “Max-Plank invention”.
• This agreement covers licensing for “sale of reagents” and for “research purposes” – not for therapeutic purposes which shall be covered under a second agreement.
• This agreement gave Whitehead the responsibility for managing the prosecution of Tuschl I provided that Max-Planck, MIT and UMass have “reasonable opportunities to advise” and cooperate with Whitehead…
• The second “Therapeutic Use Agreement” was formed in 2003.
• This second agreement was formed between Max-Planck, MIT and Whitehead, but not UMass.
• This second agreement further recites that Tuschl I is the joint invention and Tuschl II is the Max-Planck invention.
• The purpose of the second agreement is for licensing of Tuschl I and Tuschl II for therapeutic purposes.
• In theory, the first agreement bound all four parties to the second therapeutic agreement but it is stated in the second agreement that “UMass explicitly refuses to consent” to the second agreement.
• By refusing to participate in the Therapeutic Use Agreement, UMass was excluded from royalties collected by Whitehead for licensing of therapeutic uses.
• The second agreement gives the responsibility to Whitehead for filing prosecution and maintenance of Tuschl I on behalf of MIT and Max-Planck and to inform these parties including the sole exclusive licensee, Alnylam, of all Tuschl I patent actions.
• The phrase “good faith” is often repeated in the second agreement.
• The Therapeutic Use Agreement stipulates that Tuschl II shall be managed by Max-Planck keeping Whitehead, MIT, and exclusive Tuschl II licensee, Alnylam, reasonably informed.

It is Mr. Fraser’s opinion that “UMass’s decision not to join the other co-assignees in the Therapeutic Use Agreement for purposes of jointly licensing the rights to the Tuschl I and Tuschl II inventions for therapeutic purposes created the potential for UMass to have its own separate and distinct economic interests different than those of the other co-assignees of the Tuschl I applications (as well as the Tuschl II applications, due to the revenue sharing arrangements in the Therapeutic Use Agreement…).”

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