Alnylam this week responded to Tekmira’s Complaint a month ago in which it alleges Alnylam to have repeatedly misappropriated and misused Tekmira property (see also blog entry 'Enough is Enough'). In its Response, Alnylam points to the various legal arrangements between the two companies which the company feels entitles it to broad use of Tekmira’s property. In the good tradition of David vs Goliath, Alnylam filed a counterclaim against Tekmira saying that they were wronged by Tekmira for including Alnylam confidential information during a patent prosecution. The full Response can be found here, Alnylam's press release here.
Tekmira’s grievances against Alnylam can be summarized in that Alnylam behaves as if its contractual relationships and past payments entitle that company to essentially and indiscriminately all of Tekmira’s property, never mind non-disclosure agreements and the contractual limitations on Alnylam’s use of Tekmira know-how, trade secrets, and only non-exclusive access to IP generated by Tekmira after October 2008. Tekmira insists that it is still the owner of much of the IP that Alnylam licensed from them, and as the licensee Alnylam has an obligation to inform the owner, Tekmira, in how it uses the licensed technologies. Moreover, Alnylam is alleged to have engaged in a deliberate scheme to misappropriate delivery IP and used all this to marginalize Tekmira in their partnership discussions by posing to be the true liposomal siRNA delivery innovator and enabler.
Alnylam on the other hand, cites those very same agreements as evidence that it, generally speaking, indeed possesses great freedom in how it uses Tekmira property. In their Response and Counterclaim to Tekmira’s Complaint, however, Alnylam did not discuss the important question of how it has been portraying liposomal delivery to Alnylam’s past, current, and potential future partners (including Roche, Novartis, Takeda, and Sanofi-Aventis), an area where I expect some of the juicy revelations to emerge from.
Instead, Alnylam is focusing our attention on the ownership of the new star lipid ‘MC3’ and Tekmira’s supposed interference with one of Alnylam’s VSP-related patent applications. The MC3 issue opens the whole can of worms related to the historical animosities among some of the world's top liposomal researchers in Vancouver and Alnylam’s meddling therein. The VSP issue to me seems like a red herring, quite common in patent prosecution and normally to be resolved by the USPTO in the ordinary course of patent prosecution. It adds, however, to the ample evidence contained in Alnylam’s Response that there have been tensions between Alnylam and Tekmira/Protiva going back to at least 2007 which is in contrast to Alnylam’s initial reaction that Tekmira’s Complaint completely caught them by surprise.
The Surprise Myth
That Alnylam was ‘surprised’ (see the 'Big Surprise Interview' in Xconomy) by Tekmira’s apparent grievances is a tough sell at best, if not purposefully insincere. Most industry watchers have been well aware that this has been a very delicate relationship. Alnylam’s own Response actually is one of the best pieces of evidence for this. It cites a history of differences between the parties of how Alnylam was able to use the very same confidential information that are now at issue (from the Response):
“19. In contrast, Tekmira has sought to preclude Alnylam from obtaining the benefits of the agreements, including by interfering with Alnylam’s inclusion of information that is not owned or controlled by Tekmira in Alnylam patent submissions. Tekmira has also claimed confidentiality over information that is either in the public domain or to which Alnylam has contractual rights. Tekmira has also asserted an ownership interest in technology that was funded and/or independently developed by others including Alnylam.”
Furthermore, Alnylam describes that AlCana was set up specifically to avoid Tekmira eventually suing Alnylam over technology developed by Tekmira’s ex-employees. Clearly, Alnylam felt uneasy about hiring Tekmira’s ex-employees as consultants to work on competing technology.
That the tensions go back to at least 2007, is illustrated by that article in Gene Silencing News where it was reported that David Bumcrot publicly discredited Protiva’s technology only to shortly thereafter find Alnylam, hat in hand, seek help from Protiva with the clinical development of their product pipeline (here my take at the time). It is also a myth that Roche and others were altruistically led by Alnylam to Protiva/Tekmira. Roche and Alnylam, as evidenced by Roche’s Factor VII patent application, obviously tried quite hard to make liposomal siRNA delivery work without Protiva and in fact could serve as yet another piece of evidence of Alnylam's attempts to marginalize Tekmira. That Roche ended up working with Tekmira is most likely because Alnylam was afraid that it would not be able to keep the promises it made to Big Pharma when it sold those hundred million+ licenses. Alnylam’s supposedly selfless efforts in re-uniting Tekmira have to be seen in the same light.
Considering the admitted tensions over confidentiality and complaints/objections by Tekmira made in private, it rather seems to me like Alnylam is splitting hair in accusing Tekmira for not following the contractual dispute resolution mechanisms before going public. I am in no position to tell in which way Tekmira expressed its grievances to Alnylam. Email, phone call, CEO-to-CEO chat, registered letter to company headquarters or not, it is also debatable whether such procedures would even apply in a case of pre-meditated IP theft as alleged in the Complaint, or if irreparable harm were imminent. This I leave up to Tekmira’s attorneys to decide which to me look quite capable in making such a judgment.
Alnylam further cites as evidence for Tekmira’s failure to resolve their issues in private a 6-month absence of discussion between the companies’ CEOs:
“Indeed, where the initial dispute resolution procedure of the companies’ agreements requires a defined period of discussion between the company CEOs, Tekmira’s CEO’s last communication of any form with Alnylam’s CEO occurred over six months prior to the e-mail correspondence notifying Alnylam of the currently filed complaint. These actions have irreparably harmed Alnylam’s reputation with its collaborators and investors.”
I am not sure how Alnylam thinks this unambiguously proves their claim that Tekmira failed to try and resolve the dispute(s) in private. A 6-month absence does not exclude prolonged and heated discussions before the period of quiet. In a partnership that important, such a long period of no high-level discussions seems rather odd and indicative of a poor relationship. Curiously, 6 month before Tekmira filed their Complaint would seem to coincide with Novartis’ ‘surprise’ decision not to expand their relationship with Alnylam (see 'Novartis wake-up call'). Novartis, of course, is one of the companies named in the Complaint.
It may also be worth mentioning that it is Barry Greene, President and COO of Alnylam, that seems to be more the senior contract guy at Alnylam, as supported by the evidence provided by Alnylam (the Greene-Murray Letter). I just mention this since Alnylam seems to be awfully concerned about technicalities, not the spirit of their arrangements with Tekmira.
Alnylam Confused Over MC3 Inventorship
Ownership over the MC3 ionizable lipid is certainly one aspect of the Complaint. While Tekmira is constantly improving its lipids, it obviously would hurt Tekmira’s competitive position if Alnylam could also offer improved lipids without sharing the benefits with Tekmira, especially if Tekmira believes that what lipids Alnylam wants to sell belong to Tekmira after all.
Alnylam cites as evidence of their ownership over this lipid a letter by Barry Greene (not JM) to Mark Murray on March 13, 2010, in which Mr Greene seeks to confirm Alnylam’s exclusive rights to this lipid (subject to limited rights of Tekmira to use MC3 for their own product candidates), apparently concerned that Pfizer might access this lipid without Alnylam’s involvement. Mark Murray signed that letter.
As another piece of evidence of Tekmira blessing Alnylam’s ownership over MC3, the Reponse says that onAugust 7, 2009, Tekmira reviewed and signed off on the provisional patent application for MC3 presented to it by Alnylam. Finally, Alnylam says that in July 2009, as part of AlCana’s founding, Tekmira waived its rights to sue Alnylam over technology invented by ex-Tekmira employees (‘Supplemental Agreement’).
While this seems to make MC3 a cut-and-dry case, two aspects about the MC3 inventorship had made me pause when I first saw that patent application, even before the current dispute: (1) the absence of key AlCana founders as inventors in the subsequently published patent application; and (2) the fact that the two ex-Tekmira employees that are named as inventors, are named so only for United States purposes.
Provisional patent applications are normally not available from the public domain. Provisional patent applications are a way of proving one’s possession of the invention in order to secure the priority date. This can be done by providing a bunch of early data and the guidelines are rather loose. This also means that no formal inventors’ oaths have to be provided. It is therefore possible that Tekmira signed off these documents due to incomplete information, under the false impression that this indeed was an invention by Alnylam. Importantly, it was only on December 16, 2010, that the MC3 patent application WO 2010/144740 was published and presumably available to Tekmira. Before that, in conference presentations and the Q3 2010 conference call in November 2010 in which it praised MC3 as the new wonder-lipid (see 'Alnylam Green Shoots' blog), it was clear that Alnylam wanted keep the exact nature of this lipid secret.
In their Response, Alnylam claims that MC3 and certain derivatives were the invention of the scientists fired from Tekmira and that would go on to form AlCana:
“49. The MC3 lipid and certain derivatives were invented by the scientists who were fired from Tekmira and who formed AlCana, pursuant to research funded by Alnylam and with respect to certain MC3 derivatives, under a research plan agreed to by Alnylam, AlCana, UBC, Tekmira and Protiva.”
But looking at the (published) patent application, all these key people are actually missing as named inventors. I would identify these key scientists as Thomas Madden, Sean Semple, and Michael Hope and it would have been natural for Tekmira to have non-compete arrangements in place for these individuals. Importantly, these are also the senior authors on the KC2 Nature Biotech paper from January 2010, a lipid from which MC3 is derived (see also e.g. slide 28 in August 4, 2010, presentation by Alnylam at the International Liposome Research Days held in…Vancouver).
However, despite of Alnylam’s assertions that it was the fired Tekmira employees now working, for apparently legal purposes, at AlCana (but practically for Alnylam) that invented MC3, the published patent application only lists Alnylam employees (and maybe some consultants) as inventors and Alnylam as the applicant: Akinc, Dorkin, Qin, Cantley, Manoharan, Kallanthottathil, Narayanannair, Jayaraman; and (for US purposes only) Chen, Ansell. (the latter two being the two ex-Tekmira employees, but no mention of AlCana).
You would think that, as the inventors of KC2, the inventive contributions by Madden, Semple, and Hope would have played an important role in MC3, much more so than the number of trained oligonucleotide chemists from Alnylam listed as inventors on the application. Given that the Response admits that Alnylam hired the ex-Tekmira employees that would eventually form AlCana as consultants, it seems highly unlikely that Madden, Semple, and Hope played no role in the MC3 patent application.
It is equally strange that the two ex-Tekmira that are named as inventors, Chen and Ansell, are named so only for US purposes. It will be interesting to find out whether they were only added at the time that the ‘real’, that is not provisional patent application was first filed with the US, i.e. after Tekmira signed off on the provisional.
Why this is important is because the US as a first-to-invent jurisdiction is particularly strict about inventorship. In most of the rest of the world where first-to-file is practiced, particularly in Europe, inventorship isn’t that important. Practically anybody can be named as inventor on a patent application as long as nobody else challenges that inventorship. This could be used to hide the real people behind an invention as long as they are fine with it.
To be fair, there is no reason for me to believe that Chen and Ansell did not contribute to the invention, and Chen is listed with an AlCana address on the KC2 Nature Biotech paper. The absence, however, of their former, more senior colleagues at Old Tekmira and now running AlCana is rather strange and raises questions and stands in sharp contrast to Alnylam's own assertions in the Response that it was them who invented MC3 and certain derived lipids.
Why the haste in establishing Alnylam Canada, oh I meant AlCana
In their Response, Alnylam admits that AlCana was established in order to prevent Alnylam being sued by Tekmira over inventions made by Alnylam’s consultants. As Tekmira’s lawsuit proves, Alnylam had good reasons to believe that it is in a gray legal zone here- at best. Non-compete arrangements are pretty standard in the industry and just as Alnylam will do in the case of key inventive people among the 25-30% of its workforce that it fired post-Novartis, it would surprise me if Tekmira had no such arrangements in place.
Also, why would Alnylam seek to establish a separate legal entity with AlCana, when it could easily have hired these ex-Tekmira people as full Alnylam employees? After all, Alnylam de facto owns and controls AlCana as it is fully funding AlCana’s operations and enjoys exclusive rights to those inventions. It's even in the name, ‘Alnylam Canada’, oh I meant to say AlCana.
It would be wrong to underestimate Alnylam’s legal savvy. Alnylam must have had a very good reason not to hire these people directly, and don’t be surprised to find Alnylam focus on legal technicalities instead of on the spirit of Tekmira’s allegations.
In October 2008, following the merger of the Old Tekmira-Protiva research organizations (note: the two organizations were kept separate until that date in order to avoid Merck accessing IP made with the help of Alnylam’s funding of Old Tekmira), the Protiva management that took over the reins at New Tekmira fired a number of Old Tekmira people, likely the result of the long-standing rivalries between these two groups. Be that as it may, Alnylam has no business in expressing its disgust over the firings, just as Tekmira does not meddle in Alnylam’s affairs when Alnylam fires 25-30% of its workforce- not all of which were Novartis FTEs in case you believed that myth, too. It’s just another example of Alnylam’s patronizing attitude towards Tekmira which finds its ultimate expression in their apparent belief that it is entitled to essentially all of Tekmira’s property.
As mentioned above and in yet another show of altruism, Alnylam hired these people as consultants. In little more than half a year, in June 2009, the provisional patent application for MC3 was filed. This means that the work leading up to that filing must have started at least in early 2009, a spark of invention that must have occurred right after being fired from Tekmira, but also before AlCana was formed.
Curiously, the ‘Supplemental Agreement’ in which Tekmira supposedly waived its right to sue Alnylam over AlCana inventions, was signed just a month after the provisional filing date on July 27, 2009. This to me looks like trying to cover your legal bases after the fact, and it remains to be seen whether that waiver also applies to inventions made by ex-Tekmira employees before the Supplemental Agreement.
Considering the timeline of events, Alnylam was obviously very keen to put in place numerous legal arrangements in light of MC3 and AlCana (Barry Greene Letter, Provisional Review and Sign-Off, AlCana Waiver). These are certainly good arguments in favor of Alnylam. However, these are only indirect pieces of evidence, and the question that will decide over the MC3 ownership issue is whether Alnylam purposefully misled Tekmira in getting their various agreements signed by hiding the true inventorship history. The inventorship data around the MC3 patent application is just too unusual to ignore.
MC3 Timeline of Events
March 2008: Tekmira-Protiva merger. Because of their rivalries with Merck, Alnylam requires Protiva and Tekmira to operate separately until 2008.
October 2008: Combination of the Protiva and Old Tekmira research organizations, and date whereupon Alnylam only has non-exclusive licensing rights to subsequently generated Tekmira IP (possibly MC3). ‘Protiva management’ promptly fires Old Tekmira scientists with which Alnylam subsequently enters into consulting arrangements and which would go on to form AlCana.
June 10, 2009: Provisional filing/priority date of MC3 patent WO 2010/144740 A1.
July 27 2009: “Supplemental Agreement” in which Tekmira waives right to sue over AlCana inventions, i.e. inventions of their former employees.
August 7, 2009: Provisional patent application 61/185,800, which was assigned to Alnylam and filed on June 10, 2009, provided to Tekmira for review. Tekmira signs off on provisional patent application. Note: A provisional patent application is a simple priority document and typically not in the public domain. It has lax requirements, also with regard to inventorship data.
March 13, 2010: Greene-Murray Letter seeking to confirm Alnylam’s exclusive rights to MC3. Mark Murray signs off.
April 15, 2010: KC2 patent application WO 2010/042877 published. Named as inventors are Hope, Semple, Chen, Madden, Cullis, Ciufolini, Mui.
December 16, 2010: First publication of the MC3 patent application naming as inventors Akinc, Dorkin, Qin, Cantley, Manoharan, Kalllanthottathil, Narayanannair, Jayaraman; and (for US only) Chen, Ansell. Chen and Ansell both ex-Tekmira employees. However, despite Alnylam’s assertions that it was the key Old Tekmira scientists that invented MC3 and certain derivatives and that would go on to form AlCana, Hope, Semple, and Madden are missing as inventors. Hope, Semple, and Madden were also key authors in the 2010 Nature Biotech paper on KC2 from which, also according to Alnylam’s presentations, MC3 is derived. Only Chen is shared with the KC2 patent application.
Alnylam Trying Hard to Find Reason to Countersue Tekmira- Try Harder
That Alnylam would countersue Tekmira could have been expected. After all, Alnylam is the one with the cash and wants Tekmira to feel it. I am surprised, however, that despite the intricate relationship between Alnylam and Tekmira, all Alnylam could come up with were two patent applications that, due to the vagaries of patent prosecution, happened to collide with each other. Hardly a pattern of Tekmira willfully and illegally sabotaging Alnylam’s development plans.
In their Response, Alnylam says that Tekmira used confidential information from Alnylam to obstruct a patent by Alnylam related to ALN-VSP02. Specifically, Alnylam states that in 2006, Tekmira filed for a patent on Eg5 (Kinesin Spindle Protein). In that patent application, Tekmira, as was customary at the time, claimed essentially all possible siRNAs that would cover the target gene. It is also worth mentioning that Tekmira filed this patent application to claim not an siRNAs against Eg5 in isolation, but when formulated in LNPs. In addition, Eg5 was just one of the cancer-related target genes contemplated by that application.
When asked by the patent examiner to narrow down its sequences, Tekmira elected the siRNA sequence used in ALN-VSP02 (SEQ ID 20) which is the reason why the USPTO has now decided that the two patent applications clash with each other and called for an Interference. Importantly, Alnylam claims that Tekmira could only have selected the VSP sequence due to confidential information Tekmira had as a result of their collaboration. What is unusual, Alnylam claims that by the machinations of Tekmira’s patent agent, the publication of Alnylam’s patent was delayed to 3 years after the initial filing of the provisional, instead of the customary 18 months:
“58. Normally, US patent applications are published approximately 18 months from the filing date of the first priority application. However, due to the actions of Tekmira through their agent, Townsend and Townsend and Crew (now Kilpatrick Townsend and Stockton), the Alnylam VSP patent application did not publish for nearly three years from the date it was filed;
59. During this time, Alnylam freely shared details of ALN-VSP with Tekmira. In connection with the parties’ manufacturing agreement, Alnylam provided Tekmira with confidential information regarding the composition of ALN-VSP, including the 21-nucleotide sequence Alnylam used as the active ingredient in its ALN-VSP drug to target the Eg5 gene;
60. In response to a request from the US Patent Office related to their patent application, Tekmira was required to select one sequence to patent from the many thousand sequences disclosed in its patent application. Tekmira elected to patent the exact sequence present in Alnylam’s ALN-VSP drug, that was demonstrated by Alnylam to be particularly effective and which Tekmira could only know by virtue of its access to confidential information as part of their manufacturing agreement.”
For this claim of misuse of confidential information to stand, the nomination of SEQ ID20 by Tekmira would have had to occur, at the minimum, before the publication of Alnylam’s patent application. After such a publication, this sequence is fair game. There are a couple of items that are at odds with Alnylam’s claim:
Firstly, in their Response, Alnylam mentions the filing date of its patent application for what would become US patent 7718629: March 2007. If Alnylam’s claims were true, the publication of that patent application should not have occurred until after 3 years of the filing of the provisional patent application:
“56. The application to the Eg5 component of ALN-VSP was filed on March 30, 2007 as U.S. Patent Application No. 11/694,215, assigned to Alnylam Europe AG (and subsequently to Alnylam), with David Bumcrot, Pamela Tan, Hans-Peter Vornlocher and Anke Geick as inventors. It issued on May 18, 2010 as United States Patent No. 7,718,629.”
Instead of citing the patent application date, it would have been more helpful for Alnylam to mention that the provisional filing date for ‘629 was March 2006. This difference of one year may be important, because according to my study of the patent history of Tekmira’s patent application in question, No.11/807,782, Tekmira chose SEQ ID 20 in May 2010, which seems well after the supposed Alnylam provisional application date. Mind you, ‘629 issued in the same month.
What is stranger still, the information page on Alnylam's ‘629 patents shows the publication date for underlying US 2007/0281899 A1 to be...October 11, 2007 just as one would have expected from the normal prosecution of a patent application, and well before Tekmira’s election of SEQ ID20. No sign for a Tekmira-induced delay.
In summary, even assuming that the information on the Alnylam patent has it all wrong about the publication date (I highly doubt it) and that the patent publication was delayed not to three, but even four years after the initial provisional filing and more or less coincided with its issuance (has never happened in patent history IMO), is this all the dirt that Alnylam thinks, hopes it can get on Tekmira? If not, this looks like desperation and obstruction of justice by seeking to delay the resolution of the Tekmira Complaint.
VSP Patent Timeline of Events
March 2006: Alnylam files provisional application No. 60/787,762 which would become the ‘629 patent covering siRNA sequences against KSP and used in ALN-VSP02.
May 2006: Protiva (Tekmira) files provisional application No. 11/807,782 directed towards LNP formulations with siRNAs against Eg5 and other cancer-related genes.
March 2007: Alnylam files US patent application (US 2007/0281899) for what would become the ‘629 patent
August 14, 2007: Original Protiva License Agreement following which Alnylam provides Protiva/Tekmira with confidential information related to ALN-VSP.
October 11, 2007: Alnylam's US 2007/0281899 publishes. This date is in sharp contrast with Alnylam’s claims of substantial delays in the publication of this patent application.
June 11, 2009: Protiva patent application publishes as US 2009/0149403. It seems that if anything, it was the publication of the Protiva patent application that got delayed, not the ‘Alnylam VSP patent application’ as paragraph 58 of Alnylam’s Response claims. But then again, maybe Alnylam, once again, mistakes Protiva’s property as their own:
“58. Normally, US patent applications are published approximately 18 months from the filing date of the first priority application. However, due to the actions of Tekmira through their agent, Townsend and Townsend and Crew (now Kilpatrick Townsend and Stockton), the Alnylam VSP patent application did not publish for nearly three years from the date it was filed.”
May 4, 2010: Upon the request of the US patent examiner, Tekmira elects SEQ ID20 which is the same as the KSP siRNA sequence in Alnylam’s VSP. At this point, Alnylam’s sequence was long in the public domain.
May 18, 2010: United States Patent No. 7,718,629 issues.
February 28, 2011: USPTO declares Interference.
The Alnylam Response: An Exercise in Saving Face
Overall, the Response by Alnylam to Tekmira’s allegations seems meek. Alnylam knows that without digging into the data, their audience will find itself confronted with two equally plausible views. Rightfully, Alnylam admits in its Response that it is concerned about its reputation, a reputation that in the past caused many in Big Pharma to seek out Alnylam instead of Protiva/Tekmira, also for liposomal siRNA delivery.
However, upon review, Alnylam’s superficially convincing arguments leave open alternative explanations, do not get to the ground of Tekmira’s allegations, and contain a number of factual inaccuracies:
- Alnylam claims broad use of Tekmira property, but Alnylam fails to explain how they represented Tekmira property to partners, a key allegation in Tekmira's Complaint;
- Alnylam provides indirect evidence in the form of legal documents, but fails to explain the relevant background for these, especially it does not provide adequate inventorship history of MC3;
- In making these arguments, Alnylam paints a complicated web of relationships, a web however that contains a number of inaccuracies and conflicting information, e.g. (a) claiming that it was the ex-Tekmira employees that invented MC3 and went on to form AlCana, yet the patent application names mostly Alnylam oligonucleotide chemists and, for US purposes only, two ex-Tekmira employees that are not the key people of AlCana; and (b) materially getting the VSP timeline wrong.
My prediction: If this comes anywhere close to trial, somebody will get caught in their web of lies, and it won’t be pretty given the emotions running high in Vancouver and Alnylam’s meddling therein. There are three outcomes:
- Alnylam swallows its pride and makes Tekmira a takeover offer too sweet to ignore;
- The White Knight scenario, where Merck, Novartis, or another Big Pharma company takes advantage of the lawsuit and sticks it to Alnylam by acquiring Tekmira;
- Alnylam and Tekmira drag each other down by delaying a resolution.
It’s getting late, but it’s not too late yet.
Disclosure: The account above reflects my personal beliefs only and is based on my studies of publicly available documents and could contain material mistakes. No company has contributed to or encouraged the account, and no money or other forms of compensation was or is expected to be received.
