RNAi Litigation

Defendants’ summary is below.

[from Case 1:09-cv-11116-PBS Document 350 Filed 05/10/10]

Plaintiffs’ Summary

1. Max Planck and Alnylam
Max Planck is an independent, non-profit research organization based in Germany. Alnylam is a public biopharmaceutical company based in Cambridge, Massachusetts, that is developing novel methods of human medical treatment based on RNA interference (“RNAi”).

2. The Tuschl I and Tuschl II applications
This case involves a dispute concerning the prosecution of two sets of patent applications in the field of RNAi. The inventions are disclosed in the “Tuschl I” and “Tuschl II” patent applications, which are described below and listed in Part II.

a. The Tuschl I invention
The inventors of the Tuschl I invention are Dr. Thomas Tuschl, Dr. Phillip D. Zamore, Dr. Phillip A. Sharp, and Dr. David P. Bartel. Plaintiffs will present evidence showing that the Tuschl I invention reflects the creation of an in vitro, cell-free system made from the contents, or lysate, of certain cells of the fruit fly Drosophila and the use of this system to study the biochemistry of RNAi. Specifically, the evidence will show that Tuschl I inventors discovered that when they introduced long double-stranded RNA (“dsRNA”) into the fruit fly cell-free system, they observed that they could silence a target gene in that system (i.e., a gene having the same nucleotide sequence as part of the long dsRNA) by causing the destruction of the mRNA produced by the target gene. The process involved cleavage of the long input dsRNA into smaller RNA fragments of about 21-23 nucleotides but of indeterminate structure.

The evidence will show that the work of the Tuschl I inventors was published, and the first Tuschl I provisional patent application, USSN 60/193,594, was filed in the United States Patent and Trademark Office (“USPTO”) on March 30, 2000. On January 31, 2001, a second Tuschl I provisional application, USSN 60/265,232, was filed in the USPTO. The Tuschl I applications were assigned to Max Planck Society and to defendants Whitehead and UMass, as well as to the Massachusetts Institute of Technology (“MIT”), which was previously a defendant in this case but reached a settlement with Plaintiffs, including a stipulated judgment.

b. The Tuschl II invention
Plaintiffs will present evidence showing that the Tuschl II invention was conceived and reduced to practice by a different inventive entity than the Tuschl I invention. Max Planck and Alnylam will show that the inventors of the Tuschl II invention, all of whom worked at Max Planck Society, are Dr. Tuschl, Dr. Sayda Elbashir, and Mr. Winifred Lendeckel.

Plaintiffs’ evidence will show that the Tuschl II inventors isolated the small interfering RNA fragments that were the most effective in producing the RNAi effect (which they dubbed siRNAs) and then made them synthetically instead of extracting them from a lysate in which dsRNA had been enzymatically cleaved into smaller fragments. In this way, they artificially created siRNAs that are capable of targeting specific sequences of nucleotides in mRNA, and they determined that the double-stranded fragments that have an “overhang” of 1 or 2 nucleotides on one strand of the siRNA at the end called the 3 prime end (abbreviated “3’ end”) were most effective in mediating RNAi.

The evidence will show that the Tuschl II inventors submitted their initial discovery—that the use of synthetic siRNAs with 3’ overhangs were particularly effective in mediating RNAi—to the journal Genes & Development on October 25, 2000, which published it in January 2001, as Elbashir et al., “RNA interference is mediated by 21- and 22- nucleotide RNAs,” Genes & Development 15:188-200. On December 1, 2000, Max Planck Society filed EP 00126325.0 (“the ‘325 application”) reflecting this invention in the European Patent Office.

The evidence will show that shortly after the Tuschl II ‘325 application was filed, the Tuschl II inventors discovered that introducing the synthetically produced, 21-nucleotide siRNAs with 3’ overhangs into human cells could function to silence specific genes in them, without killing the cells. The evidence will further show that information relating to RNAi in human cells, invented by the Tuschl II inventors, was included in Tuschl II U.S. provisional application USSN 60/279,661 (“the ‘661 application”), which was filed on March 30, 2001.1 It also was published on May 24, 2001, as Elbashir et al., “Duplexes of 21-nucleotide RNAs mediate RNA interference in cultured mammalian cells,” Nature 411:494-498.

3. The incorporated information
On March 30, 2001, the same day the Tuschl II ‘661 provisional application was filed, the first utility patent application in the Tuschl I family, USSN 09/821,832 (“the ‘832 application”), was filed—a conversion of the Tuschl I ‘594 provisional application into a utility application.

Dr. Patricia Granahan, a patent attorney employed by Whitehead to manage its portfolio of intellectual property, will testify that in March 2001, she asked Max Planck and its counsel for permission to combine the Tuschl I and Tuschl II applications. Max Planck refused to allow the Tuschl I and Tuschl II inventions to be combined, but allowed Dr. Granahan, with conditions, to incorporate into the specification of the Tuschl I ‘832 application critical aspects of the Tuschl II invention relating to 3’ overhang subject matter and RNAi in human cells. Plaintiffs’ evidence will show that Max Planck suggested that both the Tuschl I ‘832 utility application and the Tuschl II ‘661 provisional application claim priority to the Tuschl II ‘325 application, because under European patent law this might eliminate possible prior art rejections for both applications during prosecution.

The evidence will show that, even though Max Planck allowed Whitehead to incorporate the material relating to 3’ overhang subject matter and RNAi in human cells into the Tuschl I application, it was always clearly understood by Max Planck and Whitehead that the Tuschl I and Tuschl II inventions were to be patented separately, that the 3’ overhang embodiment was the property of Max Planck, and that the commercial value of the Tuschl II invention was to be reserved for Max Planck.

Plaintiffs’ evidence will show that this understanding was subsequently confirmed in a May 3, 2004 letter from Ms. Lita Nelsen (of MIT) and Mr. John Pratt (of Whitehead) to Mr. Chester Bisbee (of UMass) (the “Nelsen-Pratt Letter”). Moreover, the evidence will show that, on July 11, 2005, Whitehead filed an Information Disclosure Statement with the USPTO, in which it represented that the Tuschl I applicants were not relying on the incorporated Tuschl II information “for … any of the currently pending claims” in the Tuschl I applications” (the “2005 IDS”).

4. The inter-institutional agreements
The evidence will show that in September 2001, UMass, Whitehead, MIT, and Max Planck entered into a Joint Invention and Joint Marketing Agreement (the “2001 Research Agreement”) for the purpose of licensing the rights to the Tuschl I and Tuschl II inventions for research purposes only. The evidence will further show that Whitehead, MIT, and Max Planck (but not UMass) entered into a Joint Invention and Joint Marketing Agreement for RNAi Therapeutic Purposes in July 2003 (“2003 Therapeutics Agreement”) for the purpose of licensing rights to the Tuschl I and Tuschl II inventions for therapeutic purposes. These agreements imposed certain important obligations on Whitehead, including fiduciary duties to Max Planck and Alnylam.

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). Specifically, the evidence will show that Max Planck agreed that revenue generated from both the Tuschl I and Tuschl II inventions would be allocated among the parties to the inter-institutional agreements so that Whitehead, MIT, and UMass (under the 2001 Research Agreement) would be able to share royalties from the Tuschl II invention, regardless of the scope of claims of the Tuschl I patents.

5. The decision by UMass to separately license its interest in the Tuschl I applications for therapeutic purposes
The evidence will show that in April 2003, UMass entered into a non-exclusive license agreement with CytRx Corporation (“CytRx”) for the purpose of licensing UMass’s rights to the Tuschl I invention for therapeutic purposes in certain specific areas.

The evidence will show that in September 2003, UMass entered into an exclusive license agreement with Sirna Therapeutics, Inc. (“Sirna”) for the purpose of licensing UMass’s rights to the Tuschl I invention for therapeutic purposes, subject to the non-exclusive rights already licensed to CytRx. Sirna, a competitor of Alnylam, was later acquired by Merck & Co., Inc. (“Merck”) for a reported $1.1 billion. For ease of reference, the Sirna-Merck entity will be referred to as “Merck.”

Plaintiffs’ evidence will show that UMass’s decision was harmful to all the coassignees of the Tuschl I applications. Plaintiffs will further demonstrate that UMass should not have become a co-assignee of the Tuschl I invention and should not have been able to license any rights in the Tuschl I patent applications, because UMass had no rights in and to the Tuschl I invention. Those rights belonged to Whitehead, and Whitehead violated duties to Max Planck and Alnylam by allowing UMass to retain an interest in the Tuschl I applications that it did not lawfully possess.

6. Defendants’ wrongful conduct with respect to the Tuschl I and Tuschl II applications
Following UMass’s decision to separately license its purported interest in the Tuschl I applications, Max Planck and Alnylam began to address with Whitehead, MIT, and UMass ways to protect the Tuschl II patent estate. Based on Plaintiffs’ analysis, the only way to preserve Tuschl II as a separate invention was (1) to remove the information from the Tuschl I applications relating to 3’ overhang subject matter and human RNAi; and (2) to withdraw the claim in the Tuschl I applications to the priority of the Tuschl II ‘325 application.

Defendants refused to remove the incorporated information or the priority claim. Moreover, Plaintiffs’ evidence will show that Defendants held secret meetings to discuss how to respond to Max Planck in connection with the Tuschl I prosecution. Plaintiffs’ evidence will show that Defendants implemented a secret strategy to persuade the USPTO to issue a patent in the Tuschl I family of applications containing the Tuschl II information in the specification, as well as the claim to priority, prior to a Tuschl II patent application issuing as a patent.

The evidence will further show that Defendants have offered lawyer-constructed, post-litigation reasons to justify their wrongful conduct, including the assertion for the first time that, because the Tuschl II invention was the “best mode” of practicing the Tuschl I invention, Defendants were entitled to misappropriate it. The evidence will also show that UMass’s newly minted contention that Dr. Zamore was an inventor of the Tuschl II invention finds no support because there was no “collaboration” between any of the Tuschl I inventors and any of the Tuschl II inventors with respect to the Tuschl II invention, which was solely the product of the work of Dr. Tuschl, Dr. Elbashir, and Mr. Lendeckl.

7. The prosecution of the Tuschl I applications has caused significant prejudice to the Tuschl II applications
Plaintiffs’ evidence will show that the prosecution of the Tuschl I applications has caused significant damage to the Tuschl II applications and will destroy the value of the Tuschl II invention unless the relief they request in the First Amended Complaint is granted.

Specifically, Plaintiffs’ evidence will show that they hoped that the Nelsen-Pratt Letter and the 2005 IDS would resolve any problems concerning the use of the Tuschl II data in the Tuschl I applications. But in June 2007, the USPTO began to reject the Tuschl IIapplications for obviousness-type double patenting (“ODP”) in view of the pending Tuschl I applications.2 In the Tuschl II cases, the USPTO has used the disclosure of the incorporated Tuschl II material and the priority claim in the Tuschl I applications as a basis for defining the Tuschl I claims as covering Tuschl II subject matter and has rejected Tuschl II claims on those grounds.

Plaintiffs’ evidence will show that all other bases for the USPTO rejections of the Tuschl II applications other than the ODP rejection can be overcome, and that the ODP rejection cannot be overcome unless Defendants are ordered to remove the Tuschl II material and the claim to priority of the Tuschl II ‘325 application from the Tuschl I applications.

Plaintiffs’ evidence will show that they have suffered past damages in the form of legal fees for the period prior to bringing this lawsuit based on their efforts to prevent Defendants from wrongfully using critical aspects of the Tuschl II invention in the Tuschl I applications. The evidence will establish that Plaintiffs have suffered damages in the form of lost licensing revenue, lost royalties, risks to existing partnerships and payments, expenses related to future agreements and partnership revenue, and costs related to Alnylam’s pipeline and protection for products.

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