RNAi Litigation

[from Case 1:11-cv-10484-PBS Document 66 Filed 05/09/12]

I. Introduction

Defendants’ reply arguments are an exercise in misdirection. The Second Amended Complaint (“SAC”) asserts a § 256 claim for sole inventorship, not priority of invention, as Defendants contend. Plaintiff UUtah thus need not allege that Dr. Bass invented the Tuschl II subject matter before Defendants, and Defendants’ principal authority is inapplicable. Nor must UUtah allege that Defendants “misappropriated” her invention.

Indeed, allegations that the Tuschl II named inventors intentionally claimed Dr. Bass’s invention as their own would render the patents unenforceable for all, contrary to the purpose of § 256 as a savings provision. Defendants’ cited authorities do not require misappropriation. Finally, Defendants’ scattershot arguments constitute evidentiary challenges and, as such, do not detract from the sufficiency of UUtah’s sole-inventorship claim. They are also factually incorrect.

Defendants’ joint inventorship challenges are equally misplaced. Defendants protest that
UUtah’s claim could “strip inventors of their exclusive patent rights” simply upon reading or hearing of relevant developments. But the Federal Circuit has ruled that collaboration that could give rise to joint inventorship is a fact-specific inquiry, which can turn on such actions as reading an article or hearing a talk at a meeting.

The named inventors’ attention to Dr. Bass’s mini-review and her presentation at the Banbury and Upsala meetings demonstrates collaboration sufficient to plead joint efforts under Kimberly-Clark and its progeny. Unable to distinguish Kimberly-Clark, Defendants invite the Court to ignore it and rely instead on contrary lower-court decisions. The Court should decline this invitation and deny Defendants’ motion.

II. Argument

A. UUtah’s Sole Inventorship Claim States a Claim That Is Plausible on Its Face

Defendants argue that UUtah “confuses a claim for sole inventorship under section 256 with a claim of ‘prior invention,’ which cannot be brought under section 256.” But it is the Defendants who are confused. The SAC does not allege that both Dr. Bass and the named Tuschl II inventors conceived of the Tuschl II subject matter albeit at different times. Rather, it alleges that Dr. Bass is the sole inventor of the Tuschl II subject matter. The SAC therefore states no claim for determining whether she or the named Tuschl II inventors were first to invent. Defendants’ reliance on Rubin is therefore misplaced. Since the SAC does not assert a claim of priority of invention, the district court’s rule in Rubin does not apply.

Defendants are equally wrong in arguing that when an omitted sole inventor seeks to correct inventorship under § 256, i.e., substituting the omitted inventor for the named inventor, he or she must prove that the named inventors “misappropriated” the invention. The Federal Circuit rejects this argument. The Stark II court considered whether § 256’s prohibition of deceptive intent relates to the named inventor or the omitted inventor. Dr. Stark sued Advanced Magnetics to correct inventorship under § 256, claiming that he was the sole inventor on one patent and a joint inventor on several other patents. After holding that § 256 prohibits relief only if the omitted inventor had deceptive intent, the Federal Circuit concluded that “section 256 allows complete substitution of inventors ….”

The court did not require the innocent omitted inventor to prove that the named inventors misappropriated the invention. Indeed, Stark II suggested misappropriation by the named inventors may constitute inequitable conduct that could render the patent unenforceable. Defendants’ argument that an omitted sole inventor must prove misappropriation thus conflicts with § 256’s purpose. The Federal Circuit has “interpreted § 256 broadly as a ‘savings provision’ to prevent patent rights from being extinguished simply because the inventors are not correctly listed.” But Defendants’ rule would require an omitted sole inventor. The Federal Circuit reiterated this conclusion in Virginia Elec. & Lighting Corp. v. National Serv. Ind., Inc. to prove inequitable conduct by the named inventors, thereby extinguishing patent rights for all. The two district court cases Defendants rely upon do not support their argument that misappropriation is an element of a claim under § 256. Defendants cite Yeda Research & Dev. Co. v. ImClone Sys. without pointing to a specific page. In fact, the Yeda court nowhere stated that misappropriating the invention is an element of a sole inventor’s claim for correcting inventorship. Defendants also cite the district court’s factual recitation in University of Colorado Found. v. American Cyanamid Co., where the court recited that the named inventors had copied parts of the omitted inventor’s publication into their patent applications. But the ruling does not require misappropriation as an element of an omitted sole inventor’s correction claim.

Defendants may wish to argue that Dr. Bass and the named Tuschl II inventors conceived of the same claimed subject matter at different times, thereby creating an issue of priority. But the focus here must be on the SAC, and the SAC makes no such allegation or claim. Counts I and III of the SAC plead claims to substitute Dr. Bass as the sole inventor under § 256, not for determining priority of inventorship as between Dr. Bass and the improperly named inventors.

Next, Defendants fire a shotgun of bullet-pointed arguments that are merely attacks on the evidence, not on the allegations of the SAC. They are also wrong. For example, Defendants assert that the SAC alleges that Dr. Bass was aware of 3’ overhangs only “of about two nucleotides in length,” whereas some of the Tuschl II patent claims recite overhangs of one to five nucleotides. The term “about two” nucleotides necessarily implies awareness of a range of lengths of nucleotides in the 3’ overhangs beyond simply two nucleotides. This allegation suffices at the pleading stage to allege a fact from which the Court may infer that Dr. Bass conceived of 3’ overhangs from one to at least five nucleotides. Even if misappropriation were a required element, the SAC could satisfy it. The SAC alleges that Dr. Tuschl did not know about 3’ overhangs before reading a draft of Dr. Bass’s mini-review and that Defendants incorporated Dr. Bass’s invention into the
Tuschl II patent applications.

Defendants concede that the synthesis of RNA was “known in the art” but assert that “…the SAC does not allege that Dr. Bass conceived of synthesizing such molecules [i.e., the specific RNAi molecules as recited in the claims].” This is wrong. The SAC alleges that “[a]s far back as 1993, Dr. Bass understood that Dicer cleaves longer strands of dsRNA into short dsRNA and makes staggered cuts that leave 3’ overhangs … of about two nucleotides in length.”

Defendants again argue that Dr. Bass’s mini-review “teaches away” from the claims’ “overhang” limitation because she hypothesized that some nucleotides might have been trimmed off by enzymes in the lysate the named inventors used to cleave long dsRNA strands. This argument is incorrect. Moreover, “teaching away” is a concept in analyzing prior art in an obviousness argument under 35 U.S.C. § 103 (teaching away “is only a component of an obviousness analysis”). Defendants cite no case in which the court applied “teaching away” in an inventorship analysis.

Finally, Defendants assert that “…the SAC fails to allege that Dr. Bass synthesized and combined the specific RNAi molecules as recited in the Tuschl II claims.” This assertion is meritless for two reasons. First, “inventorship” arises from conception, not reduction to practice. Second, Defendants are wrong about the SAC. Although unnecessary to prove, the inventors admitted in the specification that synthesizing RNA strands was “known in the art,” i.e., even they did not conceive of synthesizing RNA, although synthesis of RNA is a limitation of some claims. As persons having ordinary skill in the art, they would have known how to synthesize RNA strands already, as would Dr. Bass, and therefore it is not necessary to allege conception of synthesizing RNA (when “a method of making a compound with conventional techniques is a matter of routine knowledge among those skilled in the art, a compound has been deemed to have been conceived when it was described, and the question of whether the conceiver was in possession of a method of making it is simply not raised”). The SAC does allege that Dr. Bass reduced to practice the making of short dsRNA of 21-23 nucleotides in length with a 3’ overhang of about 2 nucleotides.

B. UUtah’s Joint-Inventorship Claim Is Facially Plausible

Defendants argue that the examples of proof of joint behavior described in Kimberly-Clark do not mean that “inventors can be stripped of their exclusive patent rights through a joint inventorship claim simply because they read an article or heard a talk at a conference ….” Their argument is nonsense. The Tuschl II inventors are already joint inventors, and recognizing that Dr. Bass is another joint inventor does not “strip” them of any “exclusive patent rights.” With or without Dr. Bass as another co-inventor, before assignment they each had an undivided interest in the entire Tuschl II Patents. Furthermore, in the “fact specific” joint-inventorship analysis, reading an article or hearing a talk at a conference are probative of joint behavior.

Defendants try to distinguish IP Innovation LLC v. Red Hat, Inc a summary judgment case. First, they invoke UUtah’s clear-and-convincing-evidence burden of proof at trial without explaining how it could be relevant on a motion to dismiss. UUtah need not prove anything at the pleadings stage; it need only plausibly allege a claim of joint inventorship. Defendants attempt to distinguish IP Innovation on the facts, noting that the properly joined inventors and allegedly improperly joined inventor “all worked at Xerox Corporation.” But they fail to note that the evidence showed the improperly and properly joined inventors did not work together and each invented the software that comprised the invention “completely independent of each other.” Nevertheless, Judge Rader denied a defense summary judgment motion on improper joinder (i.e., that the patent was invalid because a named inventor should not have been included), because of “…a factual issue about collaboration” arising from evidence that the named inventors’ mere knowledge of the allegedly improperly joined inventor’s software could constitute collaboration.

Defendants next attack the proof of joint behavior and an open line of communication between Dr. Bass and the named Tuschl II inventors in isolation. This tactic misrepresents UUtah’s joint inventorship claim, because UUtah relies on all evidence of joint behavior combined, including Dr. Tuschl’s reading of her mini-review, Dr. Bass’s presentations at the Upsala and Banbury conferences, and other communications between and among Dr. Bass and the named inventors, including her discussion of their work with Dr. Tuschl over dinner at Upsala. The SAC thus alleges many interactions that establish joint behavior and an open line of communication, at least in combination. Whether Dr. Tuschl’s reading of the mini-review, or Dr. Bass’ presentations at Banbury or Upsala, or other interactions with the Tuschl II named inventors individually “suffice for collaboration” is therefore immaterial.

1. Dr. Tuschl’s Reading of Dr. Bass’s mini-review, together with other joint behavior allegations, state a plausible claim of collaboration

Defendants do not deny that the model in Figure 1 of Dr. Bass’s mini-review describes the structure of the RNA fragments with a 3’ overhang that underpin the Tuschl II patents. They also do not dispute that before reading Dr. Bass’s mini-review Dr. Tuschl was unaware that Dicer (RNase III) cuts dsRNA into pieces of 21-23 nucleotides in length and sent an email to Dr. Zamore confirming that fact. The SAC allegations demonstrate it was only through the reliance of Dr. Tuschl and the other named inventors on Dr. Bass’s mini-review and other interactions and communications with her that the inventions claimed in the Tuschl II patents were developed through their “aggregate efforts.” The Kimberly-Clark court expansively defined the “joint behavior” required to show joint inventorship under 35 U.S.C. § 116. It held that joint invention under § 116 requires proof of “some element of joint behavior,” then gave specific examples. A plaintiff asserting a correction-of-inventorship claim may prove “joint behavior” by showing, for example,
(i) “collaboration or working under common direction,” or
(ii) “one inventor seeing a relevant report and building upon it,” or
(iii) “hearing another’s suggestion at a meeting.”

Defendants nonetheless urge this Court to rule, as a matter of law, that allegations that
(i) the Tuschl II inventors read Dr. Bass’s mini-review and incorporated her work and
(ii) at least one Tuschl II inventor heard descriptions of her work at a meeting and incorporated her work, fail to state a plausible claim of joint inventorship because they do not establish the “joint behavior” required by § 116 as a matter of law.

But Kimberly-Clark, with its specific examples of “joint behavior,” rebuts Defendants’ argument. Rebutted by Kimberly-Clark, Defendants urge the Court to reject it and rely instead upon the unpublished Rubin district-court ruling. But Rubin does not apply here. It does not hold that allegations like those in the SAC fail to state a joint-inventorship claim. Rather, Rubin was decided on a summary-judgment motion after full discovery. Also, in Rubin the only fact cited by the omitted inventors to prove joint behavior was that the named inventors read an article by the omitted inventors. Here, UUtah relies on the named inventors’ reading of Dr. Bass’s minireview and other interactions to establish joint behavior, as discussed below. Moreover, in Rubin, unlike here, the omitted inventors themselves both denied that they had collaborated with the named inventors. Finally, even if Rubin were applicable, the Court must follow Federal Circuit law, not a contrary district-court ruling.

2. Dr. Bass’s presentation at the Banbury Conference, together with other evidence of joint behavior, state a plausible claim of collaboration

The SAC alleges that just six days before the Banbury Conference, Dr. Tuschl (an inventor on both the Tuschl I Applications and Tuschl II Patents) emailed Dr. Zamore (an inventor on the Tuschl I Applications) about Dr. Bass’s conception and the Banbury Conference: On April 5, 2000, Tuschl sent Zamore an email with the subject “Re: slide for Banbury.” While the email was written before Dr. Bass’ review was published, it is clear Tuschl and Zamore had seen a draft of the review. This email contained Tuschl’s admission that he and Zamore did not know on April 5, 2000, that Dicer (RNase III) cuts dsRNA into pieces of 21-23 nucleotides long. It further alleges that at the Banbury Conference, Dr. Bass presented “her conception regarding Dicer’s role in RNAi, including her conception that the short interfering RNA (“siRNA”) would have 3’ overhangs of about 2 nucleotides,” to a group of RNAi researchers including Dr. Zamore. These allegations plausibly establish an “open line of communication” between Drs. Bass and Tuschl, either directly or indirectly through fellow RNAi researcher Dr. Zamore.

Defendants argue that collaboration cannot be pled as a matter of law by allegations that the omitted inventor communicated with the named inventor via an intermediary. Yet they cite no support for this proposition, which is incorrect. In Arbitron, Inc. v. Kiefl, the omitted joint inventor (Kiefl) alleged he communicated with the patent counsel (Flanagan) and an independent contractor of the named inventors (Arbitron employees). Arbitron moved to dismiss Kiefl’s joint inventorship claim under for failure to plead collaboration. The court denied the motion, ruling that Kiefl’s allegations of communications with intermediaries sufficiently pled collaboration: Flanagan had an open line of communication with the named inventors of the ‘276 [Arbitron] Patent. The disclosure of the Kiefl Applications to Flanagan created a nexus between Kiefl and the named inventors, conjoining their work. The test for establishing a quantum of collaboration between a party and named inventors is not demanding and requires only an element of joint behavior. The test has been satisfied by such tenuous collaborations as one inventor seeing the report of another and building upon it, or merely hearing an inventive suggestion at a meeting. A court ruled similarly in Memry Corp. v. Kentucky Oil Tech. The omitted joint inventor (Besselink) in Memry communicated with Memry’s Chief Scientist (Schetky), who in turn communicated with the named inventors (employees of Schlumberger Technology Corp. (“STC”)), regarding the subject matter of a patent portfolio (“STC patents”). Asserting a lack of proof of collaboration, STC moved for summary judgment on Kentucky Oil’s (KOT) claim that Besselink should be added as a joint inventor. The court denied the motion because KOT had shown proof of collaboration: The evidence in the record could reasonably suggest that Besselink collaborated with Schetky who then collaborated with STC: KOT has presented evidence that Schetky had discussed the STC project with Besselink and van Moorleghem before the patent applications were drafted, and that Schetky subsequently participated in the design meetings with STC …. Thus, because the evidence suggests it is possible that Besselink collaborated in the inventive contributions provided by Schetky and other Memry personnel, the court denies STC’s motion for partial summary judgment ….

3. Dr. Bass’s presentation at the Upsala Meeting, together with other evidence of joint behavior, state a plausible claim of collaboration

Defendants insist that “hearing another’s suggestion at a meeting” cannot show joint behavior as a matter of law, and to argue otherwise misreads Kimberly-Clark – even though this factor is quoted from the opinion. They cite Eli Lilly with a parenthetical that a joint-inventorship claim should be rejected “where there was only evidence of general discussions of the subject matter of the patent with the inventors during four meetings.”

Defendants misstate Eli Lilly. In fact, the Federal Circuit found in Eli Lilly that there was no evidence that the alleged omitted inventor communicated his conception in any of the meetings he relied upon to prove joint behavior. But here, the SAC alleges that Dr. Bass performed experiments that “reduced to practice Dr. Bass’ conception that Dicer was responsible for RNAi, and that therefore, short interfering dsRNA of about 21-23 nucleotides in length with 3’ overhang were the mediators of RNAi” , and that she communicated this information to Dr. Tuschl at the Upsala Meeting: Dr. Bass talked to Tuschl about her work at this meeting. She sat across from him during dinner and told him of the experiments performed in her laboratory, and that her lab had been successful in using RNAi to suppress RNAi components like Dicer by introducing dsRNA into C. elegans. Furthermore, courts do follow Kimberly-Clark and rule that suggestions stated in meetings may establish collaboration, even when the attendees are from completely separate entities. For example, in SPH Am., LLC v. Acer, Inc., the court ruled that suggestions made by Motorola employees in meetings of certain telecommunications-standards-setting organizations sufficiently alleged a “quantum of collaboration” to establish joint inventorship when incorporated into a patent application by another company’s attendees.

C. UUtah’s State-Law Claims Each States a Plausible Claim to Relief

Defendants argue that UUtah’s state-law claims should be dismissed because they derive from its inventorship claims, which they also argue should be dismissed. Because UUtah sufficiently states inventorship claims, it follows that it also sufficiently states the allegedly derivative state-law claims.

Defendants assert that UUtah’s unfair-competition claim is implausible because the SAC does not “explain why an inventorship dispute should give rise to an unfair competition claim under the facts of this case.” The SAC alleges that the Max Planck Defendants and Alnylam represent to the public that they developed and own the intellectual property they appropriated from UUtah and they have passed off UUtah’s intellectual property as their own.

There is a market for the intellectual property at issue, and Defendants have collectively reaped millions of dollars from licensing. Potential licensees will be deceived by the Max Planck Defendants and Alnylam’s misrepresentations. The SAC alleges that this “has caused, and will cause, consumer confusion,” causing damages to UUtah, e.g., loss of licensing revenue. These allegations state a plausible unfair-competition claim.

Count V of the SAC is UUtah’s only declaratory-judgment claim, which seeks a declaration that Dr. Bass is the sole or a joint inventor of the subject matter claimed in the Tuschl II Patents. While Defendants contest inventorship on the merits, they do not dispute that declaratory relief as to the Tuschl II Patents is a permissible form of relief.

III. CONCLUSION

For the reasons set forth herein and in UUtah’s Memorandum in Opposition to Defendants’ Motion to Dismiss University of Utah’s Second Amended Complaint, the Court should deny Defendants’ Motion to Dismiss University of Utah’s Second Amended Complaint.

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