Can Moderna beat Arbutus’ patent lawsuit for its LNP patents?
Zachary Silbersher
Arbutus has finally sued Moderna for allegedly infringing its LNP patents. I previously blogged about the Arbutus/Moderna patent dispute here, here and here. Arbutus has already defended the validity of two of its patents, which puts it case on strong footing. But Moderna may nevertheless have a targeted non-infringement defense that could neutralize Arbutus’ claim to any royalties on Moderna’s Covid vaccine.
Moderna previously challenged three patents owned by Arbutus, which appear to have been exclusively licensed to Genevant. Those patents include the ‘069 patent, the ‘435 patent, and the ‘127 patent. The IPR for the ‘127 patent invalidated all claims, but the decision remains on appeal. Arbutus survived the IPRs for the ‘069 and ‘435 patent with many claims intact, and in December 2021, the Federal Circuit upheld those IPR decisions.
In its lawsuit against Moderna, Arbutus has asserted the ‘069 patent and the ‘435 patent, as well as four additional patents that were not previously challenged by Moderna in IPRs. That means, Moderna could theoretically challenge their validity now—either in the district court action or in new IPRs, or both. Yet, three of those new patents are continuations of the ‘069 patents. That suggests any invalidity challenges will be difficult. The fourth new patent asserted by Arbutus is unrelated to either the ‘069 or ‘435 patents, but its subject matter appears relatively similar. Overall, Arbutus’ validity case appears to be on relatively strong footing.
As for infringement, Arbutus’ complaint shows that it does not have access to a proprietary sample of Moderna’s Covid vaccine. Rather, to allege infringement, Arbutus has essentially relied upon public statements by Moderna.
The asserted patents are generally directed to a nucleic acid-lipid nanoparticle containing four ingredients: a cationic lipid, a phospholipid, cholesterol and a conjugated lipid. The patents further recite specific mol-percentage ranges for each respective ingredient. To allege infringement, Arbutus’ complaint relies upon Moderna’s statements within a Phase 1 protocol as well as descriptions within a foreign patent application filed by Moderna of the respective ingredients of its LNP delivery systems, and the respective mol percentages of each ingredient. During discovery, Arbutus will gain confidential access to Moderna’s vaccine. Yet, at the outset, its complaint sets forth a fairly strong case of infringement.
On the other hand, there is one potential weakness in Arbutus’ case that may provide Moderna a defense to paying Arbutus any royalties.
Arbutus’ complaint indicates that Moderna is using a cationic lipid for its vaccine known as “SM-102”. That lipid has the following chemical formula: “heptadecan-9-yl 8-((2-hydroxyethyl) (6-oxo-6-(undecyloxy) hexyl) amino) octanoate”. Moderna has publicly indicated that it has patents covering different features of its Covid vaccine. One of those patents, U.S. Patent No. 9,868,692, expressly covers the SM-102 lipid. The chemical formula for SM-102 matches the formula described as compound 25 in the ‘692 patent. (‘692 patent at column 173, line 40). The ‘692 patent claims the ionizable lipid described as “Formula B.” (See id. at column 325, line 50). During examination of the ‘692 patent, Moderna confirmed that “Formula B” in claim 1 corresponds to compound 25 at column 173.
Accordingly, Moderna’s defense to Arbutus’ patent lawsuit may be that it has its own patent covering the cationic lipid. Moderna’s ‘692 patent issued after the priority date for Arbutus’ patents. Thus, if Moderna invented a new cationic lipid after Arbutus filed for its patents, then Moderna may argue that Arbutus’ patents cannot encompass or cover an LNP delivery system that uses Moderna’s proprietary cationic lipid, namely, SM-102, which was patented after Arbutus filed for its own LNP patents.
If successful, this defense could completely neutralize Arbutus’ entire suit to the extent each of the patents requires a cationic lipid. This potential defense raises knotty legal issues regarding whether after-arising technology, which is invented after the priority date of an asserted patent, can nevertheless be infringing an earlier-filed patent. That defense requires both legal and factual considerations, and therefore, is unlikely to be resolved early in the suit.
Arbutus’ complaint against Moderna inidicates that Moderna has been reluctant to enter any meaningful licensing negotiations with Arbutus to date. Given that, Moderna may not capitulate anytime soon, but may be willing to go the mat on a defense that it could potentially win. Time will tell.