by Dennis Crouch
Arbutus owns several patents related to a lipid-based delivery system for nucleic-acid-based treatments. U.S. Patent 8,058,069 and 9,364,435 are the two at issue here. The claims are directed to the creation of a “acid-lipid particle” that includes some RNA along with lipids to stabilize the sequence, including particular percentages of cationic lipids, non-cationic lipids, and conjugated lipids.
COVID: If you have been following the news, you know that the COVID-19 vaccines distributed by Moderna and Pfizer deliver mRNA to the cells using lipid nanoparticles. Although Arbutus has apparently not threatened Moderna with an infringement action, it has apparently requested a broader license agreement and refused to issue a covenant-not-to-sue. Moderna recognizes “a substantial risk” that Arbutus will assert the patents in an infringement lawsuit “targeting Moderna’s COVID-19 vaccine.”
Pre-COVID: Moderna had been working on mRNA delivery systems and had previously licensed the patents for research work using a milestone payment scheme. Moderna challenged the patents via IPR in 2018 and 2019 so that it could use the inventions without royalty payments or other reporting. IPR2018-00739; IPR2019-00554. This was all before COVID, but the risk and value have ramped-up exponentially. The PTAB granted the IPR petitions but substantially sided with the patent holder:
- ‘069 patent — all claims confirmed (not proven invalid); and
- ‘435 patent — claims 7–8, 10–11, 13, and 16–20 are confirmed; Claims 1–6, 9, 12, and 14–15 invalid as anticipated.
The parties appealed their respective losses, and the Federal Circuit has now affirmed on all grounds — although a portion of its decision is a procedural shortcut. Because the patents were left largely intact, we have a good likelihood of further litigation between these parties over the patents (or else a new license in the background).
The basic idea here is that this area of innovation is extremely tricky and unpredictable. Thus, although the “general conditions for a nucleic acid-lipid particle were disclosed in the prior art,” the particular claimed lipid profile would not “have been achievable through routine optimization.”
Standing to Appeal: It is pretty clear that at this point the post-COVID relationship between the parties is such that Moderna has standing in court to challenge these patents. However, as I mentioned, the IPRs were filed pre-COVID and the 2018 IPR was appealed in November 2019 — well before Moderna had an inkling that it would be making a COVID-19 vaccine. The problem for Moderna here is that the appellate court can only hear cases involving an “actual case or controversy” between the parties. And, that actual case-or-controversy must persist throughout the entire appeal (from beginning to end). What Moderna needs to show is that the patent served as a concrete and immediate threat as of that November 2019 date. I mentioned that there was a license agreement, but the court found that any payments due under that agreement too speculative to generate standing since – at the time – Moderna was not actually doing the planned research. Further, the patentee (at the time named Protiva) “emphasized that it had never initiated a patent infringement action or directly accused Moderna of infringing its patents.”
Things had changed dramatically by the time Moderna filed its opening brief in May 2020. But, as I mentioned, courts require continuous standing throughout a lawsuit, and it just wasn’t there in November of 2019. The result then is that Moderna was not permitted to appeal its loss in the ‘435 case.