Regeneron's Actions to Get Patent ‘Inequitable,' Court Says

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By John T. Aquino

Nov. 3 — A federal district court concluded Nov. 2 that Regeneron Pharmaceuticals had engaged in inequitable conduct in obtaining its patent for a mouse strain useful for discovering therapeutic antibodies.

A final ruling of inequitable conduct could make the patent unenforceable.

`Troubling Litigation Tactics.'

In the court's decision, Judge Katherine B. Forrest emphasized the scope of the misconduct, noting Regeneron's actions before the Patent and Trademark Office as well as “troubling litigation tactics” during the lawsuit. She wrote, “[I]t appears that the very birth of this patent was beset by misconduct as well. And so it has come full circle. That which was obtained by misconduct ends as a result of misconduct.”

The U.S. District Court for the Southern District of New York said that Regeneron purposefully withheld information from the patent office about prior patents and publications that could have resulted in the company's patent being ruled unpatentable as obvious or anticipated. The court’s conclusion came at the end of a trial that began with Regeneron suing Merus BV for patent infringement.

“[I]t is clear that this litigation should never have been commenced. It is not unusual for one litigant to argue as much at the outset of a case, but it is much rarer for the evidence to prove it to be true. It is true here,” Forrest wrote, referencing Merus's initial allegations of Regeneron's misconduct.

Regeneron Will Appeal

The court gave the parties 14 days to confer and file a proposed order for the court’s consideration.

A Regeneron spokeswoman told Bloomberg BNA in a Nov. 3 e-mail, “We respectfully disagree with the judge's decision in this case—a decision that we believe misunderstands the relevant science and legal standards—and will be filing an appeal at the earliest available opportunity in the U.S. Court of Appeals for the Federal Circuit.”

Withheld Documents Revealed

Regeneron, which is based in Tarrytown, N.Y., sued Merus in 2014 for infringement of two patents for the VelocImmune mouse, a genetically modified animal that makes part-human and part-mouse antibodies for use in developing human therapies (8 LSLR 299, 4/4/14).

Merus responded by claiming that one of the patents at issue, U.S. Patent No. 8,502,018, was invalid because Regeneron had tried to deceive the PTO while the application was under consideration.

Forrest said in the court's decision that Tor E. Smeland, Regeneron's executive director of intellectual property, and Andrew J. Murphy, one of the '018 patent's inventors, submitted statements to the court on May 29 relating to prior art references that Merus asserted should have been disclosed to the PTO in its review of the patent.

The declarations led to a waiver of attorney-client privilege, which in turn prompted the court to order a review of the “privilege log” maintained by Regeneron patent counsel Foley Hoag LLP, Forrest wrote. A privilege log describes documents or other items withheld in a civil lawsuit under a claim that the documents are “privileged” from disclosure due to attorney-client privilege, work product doctrine, joint defense doctrine or some other privilege.

Forrest noted that the review of the log both confirmed Merus's concerns and revealed additional serious discovery issues: a number of nonprivileged documents related to topics at issue throughout the litigation had been withheld on the basis of privilege and other documents that should have been produced hadn't been disclosed to Merus.

Court Record, Science Contorted

The court said that the principal question before it was whether, individually or collectively, the prior art references that had been withheld had met the rigorous “but-for” standard of materiality required by Therasense, Inc. v. Becton, Dickinson & Co., 659 F.3d 1276, 1291 (Fed Cir. 2011) (5 LSLR 543, 6/3/11).

“They do,” Forrest wrote, quoting Therasense: The “PTO would not have allowed [this] claim had it been aware of the undisclosed prior art.”

Forrest said, “Throughout the history of this case Regeneron has sought to discover how it needed to define its invention to have it fit a cognizable theory of infringement; it has had to contort science, the documentary record, and an alleged commercial embodiment to make them fit the framework of a specification that described a far broader, not as useful, and possibly altogether different invention; and it has demonstrated that the invention disclosed in the '018 Patent is not the same as that Regeneron described during prosecution to the U.S. Patent & Trademark Office.”

Forrest had issued a preliminary finding of inequitable conduct on Aug. 6 and asked the parties to respond before she presented the court's final ruling on the matter (9 LSLR 943, 8/21/15). Regeneron said in a letter to the court that it believed it had acted in good faith and with candor while obtaining the patent and that, “absent a finding of egregious misconduct,” a ruling of inequitable conduct would be improper.

To contact the reporter on this story: John T. Aquino in Washington at jaquino@bna.com

To contact the editor responsible for this story: Lee Barnes at lbarnes@bna.com

The court's decision is at http://www.bloomberglaw.com/public/document/Regeneron_Pharms_v_Merus_BV_No_14_Civ_1650_KBF_2015_BL_360251_SDN.