Lessons From The Google Patent Acquisition For Pharma And Biotech Companies

By D'vorah Graeser

The term “patent thicket” relates to a patent portfolio that extensively covers a particular technological niche, effectively blocking any competitor’s entry into the market. As the name suggests, the competitor becomes entangled in the “thicket” of patents and is unable to locate any clear path to avoid them. Effectively, the competitor loses “freedom to operate” or the ability to make, use, or sell inventions in that niche.

Of course, if the competitor is able to obtain a license to the patent portfolio, then the patent thicket no longer represents a barrier to entry. Instead, it is simply an added cost of doing business. The owner of the patent portfolio decides to whom to license these patents or even whether to license them to anyone at all, thereby controlling entry to the niche.

Such patent thickets frequently arise when a research leader obtains many early-stage patents in a particular technological niche. The earlier a leader enters or even creates such a niche, the broader the resulting patent protection. According to international requirements, inventions claimed in a patent must be novel and nonobvious, effectively different from everything which was known before the initial patent application was filed. Thus, early research leaders in a particular technology have the chance to obtain broader patent protection and to more effectively block others from entering.

The ultimate effect of a patent thicket, however, depends on the desired goal of the owner of the patent portfolio. For example, the much maligned “patent troll” or NPE (nonpracticing entity) only wants to make money by licensing or selling its patents. Sometimes a company (or a consortium of companies) may choose to purchase a patent portfolio simply to prevent it from being purchased by an NPE. Two recent examples of this are the purchase of the Nortel Networks patents by a consortium (including Apple, Microsoft, and others) and Google’s purchase of Motorola Mobility (a company that was pared off from Motorola itself) in order to obtain ownership of its patents. In both cases, the patent portfolios were purchased, directly or indirectly, to allow these companies and their allies to enjoy freedom to operate in a particular technological area and to be able to assert the patents against their competitors.

Alnylam’s Patent Approach
Another method to build a patent thicket is to license technology developed by others, such as universities, which would prefer not to commercialize the technology themselves. Alnylam Pharmaceuticals, for example, has adopted such an approach to obtain exclusive licenses to the most important broad patents in the area of siRNA (small interfering ribonucleic acid) molecules, which block production of proteins through interference with the corresponding mRNA (messenger RNA) molecule. Of the most fundamental patents in the siRNA technology area, Alnylam either owns or licenses all of them. Thus, Alnylam, an early research leader, has effectively become a patent giant in the technological area of siRNA.

Alnylam estimates that its most fundamental platform RNAi patents will expire between 2016 and 2025. The list of companies with which Alnylam has successfully concluded partnering deals is quite extensive and includes Takeda, Cubist, and others. All of these deals are based upon these fundamental platform patents.

Alnylam provides access to its patent portfolio through licensing agreements — at a price. Its 2010 revenue from its collaborations was estimated to be $100 million in its SEC annual filing. Therefore, Alnylam could pick winners and losers in the siRNA field, as without access to the Alnylam patent portfolio, it would be difficult for any company in this area to make, use, and sell its siRNA product.

Protecting Patents
A recent court case, Tekmira vs. Alnylam (and the countersuit by Alnylam), indicates that Alnylam is aggressive in establishing patent positions in technological niches within the siRNA area, even at the expense of a so-called research “partner.” Tekmira develops lipid-based delivery technologies for siRNA molecules. It accuses Alnylam of stealing trade secrets and attempting to patent its proprietary technology. In its 2010 SEC 10-K filing, Alnylam states it has an exclusive license to three Tekmira patents, which it believes is critical to the development of this lipid-based delivery technology.

While some other companies do own significant siRNA IP, their holdings are limited in scope. For example, Silence Therapeutics holds certain important patents for specific siRNA delivery methods and for specific siRNA chemical modifications. It also holds an exclusive license to three Zamore patent families, which relate to siRNA stability. Silence Therapeutics also uses a differently structured siRNA, which it claims is not covered by the fundamental patents owned or licensed by Alnylam, a theory which has not yet been tested in court. Alnylam and others have joined to oppose the European grant of a Silence Therapeutics patent relating to siRNA stabilization; various re-examinations of U.S. Zamore family patents have also been requested and are on-going. Similarly, while Tekmira has significant siRNA delivery IP, Alnylam has its own delivery technology that it could use if prevented from accessing Tekmira’s technology.

But, the early promise of siRNA therapeutics has given way to some disappointment and disillusionment. Merck (having made a large investment of over $1 billion in this field) earlier this year closed an RNAi research facility that it acquired when it bought siRNA. Novartis and Roche have both elected to stop partnership deals with Alnylam, with Roche pulling out of the field altogether. Problems in delivery remain a significant stumbling block, increasing the importance of the Tekmira/Alnylam battle. If Alnylam wins, it could seal its dominance in the siRNA technological space for years to come.

About The Author
Dr. D’vorah Graeser is the founder and CEO of Graeser Associates International (GAI), an international intellectual property firm specializing in the preparation, filing, and prosecution of medical device, biotechnology, pharmaceutical, bioinformatics, and medical software patents.