Contributors: Knobbe Martens
Ranges for Interdependent and Interactive Components Can Be Tricky to Derive
In Modernatx, Inc. v. Arbutus Biopharma Corporation, Appeal No. 20-2329, the Federal Circuit held that a presumption of obviousness based on overlapping ranges requires showing that the overlapping range is actually taught by the prior art.
Moderna petitioned for IPR against an Arbutus patent directed to stable nucleic acid-lipid particles comprising a nucleic acid. Moderna contended that all of the ranges for the components in the claimed nucleic acid-lipid particle were disclosed or taught by the prior art, and that a presumption of obviousness should therefore apply. The PTAB disagreed that the presumption applied because the prior art expressly disclosed the ranges for only three out of the four sub-components of the claimed composition. Moderna derived the overlapping range for the sub-component with no specific disclosure in the prior art by making certain assumptions about the other three sub-components. The PTAB rejected Moderna’s argument, noting that the claimed range for the fourth sub-component was not necessarily disclosed based on broader ranges for the other three components. The PTAB found the claims were not unpatentable as obvious. Moderna appealed.
The Federal Circuit first addressed standing, noting that a party’s participation in the underlying IPR before the PTAB is insufficient by itself to confer standing on that party to appeal. The Federal Circuit explained that a specific threat of infringement is not required, but it is sufficient for the appellant to show that it has engaged in, is engaging in, or will likely engage in activity that would give rise to a possible infringement suit. The Federal Circuit found Moderna had demonstrated a risk of suit by Arbutus based on the combination of its own activities in developing the COVID-19 vaccine, Arbutus’s broad public statements about its extensive patent coverage in the area, and Arbutus’s refusal to grant a covenant not to sue.
The Federal Circuit then affirmed the PTAB’s decision that the asserted claims were nonobvious. In particular, the Federal Circuit agreed that a presumption of obviousness did not apply because Moderna failed to show that an overlapping range was actually taught by the prior art.
(Biotechnology, Standing, Obviousness; Prepared by Shelley Chen)
No Standing in IPR Appeal for Sublicensee’s Speculative Royalty-Based Injuries
In Modernatx, Inc. v. Arbutus Biopharma Corporation, Appeal No. 20-1184, the Federal Circuit held that a sublicensee’s theory of royalty-based injury was too speculative to support standing on appeal. Later changes in the factual basis for standing cannot support standing where the original basis is not shown to be continuous.
Moderna filed a petition for inter partes review challenging certain claims of Arbutus’s patent related to methods of making and administering stable nucleic acid-lipid particles. The Board found that, while certain claims were anticipated, Moderna had failed to prove that the remaining claims were either anticipated or obvious. Moderna appealed the remaining claims.
On appeal, Moderna initially stated that it did not base its standing on a risk of a future infringement suit. Rather, it based its standing on its status as a sublicensee of Arbutus’ patent with “actual monetary obligations . . . that are impacted by the Board’s validity determinations.” However, over a year later, Moderna filed a motion to supplement the record to provide evidence that it had (1) terminated the programs that involved Arbutus’ patent, and (2) begun development of a COVID-19 vaccine which had in turn created a significant risk of a future infringement suit.
Rather than examine the merits of the Board’s decision, the Federal Circuit dismissed Moderna’s appeal due to a lack of standing. The Federal Circuit first explained that Moderna’s initial theory of financial injury was too speculative. In particular, Moderna hadn’t made a royalty or milestone payment in 5 years and failed to identify any expected future payments. Additionally, Arbutus’s patent was only one of many licensed patents involved in Moderna’s sublicense. Moderna failed to provide any evidence as to how, if at all, its sublicense would be affected by the invalidation of only the Arbutus patent at issue, but not the other licensed patents.
Finally, the Federal Circuit rejected Moderna’s supplemental standing argument. The Federal Circuit explained that, even if Moderna had established standing at the time it filed its appeal, Moderna failed to show that its termination of the sublicense programs occurred after its COVID-19 vaccine development had created a substantial risk of a future infringement suit. The court therefore applied the rule that an “intervening abandonment of the controversy produces loss of jurisdiction.”
(PTAB Appeal, Standing; Prepared by James Yang)