16 February 2017

USPTO Board Terminates CRISPR Patent Interference

TerminatedOn Wednesday 15 February 2017, the US Patent and Trademarks Office (USPTO) Patent Trial and Appeal Board (PTAB) handed down its much-anticipated decision in the patent interference proceedings initiated by the University of California (‘UC’) against the Broad Institute of MIT and Harvard (‘Broad’) in relation to CRISPR/Cas9 gene editing technology.  That decision, in short, is that there is ‘no interference in fact’.  That is to say, the three judges making up the PTAB panel have determined that Broad’s development of the CRISPR/Cas9 system for use in eukaryotic cells (i.e. complex cells with, among other characteristics, distinct nuclei) was a non-obvious advance over UC’s development of the system for use in simpler prokaryotic cells (specifically, bacteria), and that there is thus scope for both parties to hold distinct patents.

In its full decision [PDF, 412kB], the PTAB summarises its findings as follows:

Broad has persuaded us that the parties claim patentably distinct subject matter, rebutting the presumption created by declaration of this interference. Broad provided sufficient evidence to show that its claims, which are all limited to CRISPR-Cas9 systems in a eukaryotic environment, are not drawn to the same invention as UC’s claims, which are all directed to CRISPR-Cas9 systems not restricted to any environment. Specifically, the evidence shows that the invention of such systems in eukaryotic cells would not have been obvious over the invention of CRISPR-Cas9 systems in any environment, including in prokaryotic cells or in vitro, because one of ordinary skill in the art would not have reasonably expected a CRISPR-Cas9 system to be successful in a eukaryotic environment. This evidence shows that the parties’ claims do not interfere. Accordingly, we terminate the interference.

This is a considerable win for Broad which, subject to a potential appeal, has for now delivered a fatal blow to UC’s hopes of invalidating a number of Broad’s CRISPR-related patents and applications.  Unsurprisingly, Broad has reacted to the decision by declaring its full agreement with the PTAB, while UC maintains its belief that the evidence is on its side.  The stock market also reacted quickly to the news, adding US$200 million to the value of the Broad-connected biotech company Editas Medicine Inc.

Reactions to the Decision

Broad’s response to the decision includes the following statement:

We agree with the decision by the patent office, which confirms that the patents and applications of Broad Institute and UC Berkeley are about different subjects and do not interfere with each other.
Broad Institute and collaborators were issued patents for methods for genome editing in eukaryotic (including human) cells, while UC Berkeley and collaborators applied for patents concerning CRISPR methods based on studies in cell-free systems that did not involve genome editing in eukaryotic cells.

UC says that it...
...respects today’s “no interference-in-fact” decision by the U.S. Patent Trial and Appeal Board (PTAB). ... As a result, the Doudna/Charpentier [i.e. UC] patent application will be returned to the patent examiner, who previously determined that their patent application is allowable. We are pleased that UC’s application, covering the invention and use of CRISPR gene editing in all cells, can move toward issuance as a U.S. patent.
We continue to maintain that the evidence overwhelmingly supports our position that the Doudna/Charpentier team was the first group to invent this technology for use in all settings and all cell types, and was the first to publish and file patent applications directed toward that invention, and that the Broad Institute’s patents directed toward use of the CRISPR-Cas9 system in particular cell types are not patentably distinct from the Doudna/Charpentier invention. For that reason, UC will carefully consider all options for possible next steps in this legal process, including the possibility of an appeal of the PTAB’s decision.

Money talks, however, and so the reaction that may be most important is that of the stock market, which gave Editas Medicine Inc (NASDAQ:EDIT) a 28.8% boost over its opening price for the day, corresponding to an increase in market cap of nearly US$200 million, on the back of the news. 
20170216 NASDAQ-EDIT
Editas was founded in 2013 by Broad research leader/inventor Feng Zhang, and is in the unique position of holding an exclusive licence on applications of Zhang’s CRISPR/Cas9 inventions to diseases.  This means that other company’s can obtain a licence for a disease-related application of the patented technology only if Editas passes on its rights to that particular application.

What Does ‘No Interference in Fact’ Mean?

The PTAB’s finding that there is ‘no interference in fact’ essentially means that the USPTO was wrong to institute interference proceedings in the first place.  An interference arises under the former ‘first-to-invent’ rule that applies in this case when two (or more) contemporary patent applicants claim the same invention.  Since only one party can be the true ‘first inventor’ in such a situation, the purpose of interference proceedings is to determine which applicant has (or, more accurately, is able to prove) the earlier date of invention.

Accordingly, if the patents/applications implicated in the proceedings do not, in fact, claim the same invention, then there is no interference.  In that case, it is entirely possible, subject to all of the other patentability requirements being satisfied, that both parties can obtain separate patents on their respective inventions. 

When I reported on the hearing back in December, I explained the issue in the particular case of the UC and Broad patents as follows:

Remember, the UC team was first to get CRISPR/Cas9 gene editing to work.  They did it in prokaryotes (i.e. bacterial cells), and they did it using a single-molecule DNA-targeting RNA.  UC contends that once CRISPR/Cas9 had been demonstrated in prokaryotes, it was obvious (in the sense required by the patent law) that it could be made to work also in eukaryotes, and thus the subsequent success by Broad (and by UC, and by about half a dozen other teams) in doing so cannot constitute a distinct and separate invention.  (To be an ‘invention’, as required by the patent law, it is not enough for something merely to be new, it must also be nonobvious.)  On this basis, UC also contends that it is entitled to claim as its invention CRISPR/Cas9 gene editing technology generally (i.e. not limited to prokaryotes, just like I hypothetically claimed the broader mechanical principles underlying my mousetrap), using its method of employing single-molecule RNA.

Broad disagrees.  It says that getting CRISPR/Cas9 to work in eukaryotes is a separate and distinct invention, and was not obvious based upon the UC team’s work with prokaryotes.  Furthermore, the Broad team’s initial successful experiments employed two-molecule guide RNA.  Broad thus contends that what it is entitled to claim as its invention (and UC is not) is the more general use of guide RNA (whether or not a single molecule) to achieve CRISPR/Cas9 gene editing in eukaryotes.

On the basis of the arguments made by UC and Broad, whether or not there is an interference to be decided comes down to a question of obviousness.

The PTAB has sided with Broad, finding that the methodology to make the CRISPR/Cas9 system function in eukaryotes was not obvious.  Being non-obvious means that it was inventive, and thus Broad is entitled to an independent patent distinct from, and non-interfering with, UC’s claims.

Who Owns What? It’s Complicated!

The thing that makes it harder to get one’s head around the issues in this case is the way the various developments and claims overlap with one another.  I shall try to explain this with the assistance of a simple Venn diagram.
In the diagram above:
  1. the orange ‘CRISPR in prokaryotic cells’ ellipse represents the scientific advance that was actually achieved by the UC team – i.e. they demonstrated the operation and application of the CRISPR/Cas9 system in bacteria;
  2. the red ‘CRISPR in eukaryotic cells’ represents the scientific advance that was subsequently achieved by the Broad team – i.e. they were the first to demonstrate the practical application of the CRIPSR/Cas9 system in more complex cells; and
  3. the blue encompassing ellipse represents all possible applications of the CRISPR/Cas9 system, including applications in both prokaryotic cells and eukaryotic cells.
The complication arises because although UC only demonstrated the orange ellipse, their patent application claims the blue ellipse.  Thus UC’s claims wholly encompass what the PTAB has now determined to be Broad’s independently patentable invention.

To readers less familiar with patent law, this may appear somewhat absurd.  How can it be that the UC and Broad claims do not ‘interfere’ when the most basic pictorial representation shows that Broad’s claims fall entirely within the territory claimed by UC?

The reason is that patent claims are not really subject to the normal rules of set theory when it comes to validity.  An inventor who makes a significant breakthrough may well be legally-entitled to claim a field that is significantly wider in scope than the specific examples, or ‘embodiments’, actually demonstrated.  The fact that this wider field includes scope for further non-obvious advances does not necessarily mean that the breakthrough invention is claimed too broadly.

When it comes to the scope of rights or, equivalently, infringement, then the set theory picture is a far more accurate representation of the legal position.  If (as it anticipates) US is indeed granted claims corresponding with the blue ellipse, then its patent will indeed cover everything in both of the orange and red ellipses.  Thus anybody wanting to work with CRISPR/Cas9 in eukaryotic cells will require licences from both Broad and UC. 

Equally importantly, Broad and UC (and their associated companies) will need to cross-licence each other’s patents in order to work in this area.  What impact this might have on Editas’ exclusive rights to disease-related applications of the Broad-patented technology remains to be seen.  But the fact that this commercially-significant issue remains outstanding suggests strongly to me that this dispute is unlikely to be over.

Conclusion – On to the CAFC?

As UC has foreshadowed in its statement, the PTAB decision is subject to a possible appeal to a US Federal Court, most likely the specialised Court of Appeals for the Federal Circuit (CAFC).  Unless the PTAB decision is overturned on appeal, the interference proceedings will be terminated, and (subject to any other creative avenues its lawyers may be able to explore) UC will lose the opportunity to further pursue its stated belief that ‘the Broad Institute’s patents directed toward use of the CRISPR-Cas9 system in particular cell types are not patentably distinct from the Doudna/Charpentier invention’.

In light of this, and the clear commercial significance of the outcome, my prediction is that UC will appeal.  But for now, at least, Broad and its licensees will be celebrating this win.


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