Court Ruling Raises Concerns About Ariad's Conduct and Patents

Over the years on this blog, I’ve written quite a few times about Ariad Pharmaceuticals (ARIA) and their quest to assert some rather sweeping patent rights. For background, see here and search for "Ariad" - there's a lot to read, if you're in the mood. The short version is that the company is the licensee of a patent which was issued with extremely broad claims around the NF-kappaB pathway in cells. Dozens and dozens of claims – the thing just drones on and on about compounds, methods, techniques that affect, inhibit, modulate, fill-in-your-verb anything that regulates, changes, modulates, etc. anything to do with NF-kappaB.

My problem with that is I think that claiming such broad swaths of biochemical mechanism is counterproductive. It’s bad for drug research, bad for patent law, and bad for the enterprise of science in general. For example, the company had no compounds to actually enable a lot of these claims when the patent was issued. A lot of other people did, though, because that pathway is tied up with all sorts of cellular processes, especially those dealing with inflammation and immune response. So Ariad immediately went after other companies with profitable drugs whose mechanism of action went, at least partly, through their newfound patent rights. I find it perverse that a company, rather than patenting their drug, could be able to patent the idea of how a yet-to-be-found drug might work, or retroactively, having had no role in the process at all, claim the rights to other drugs that had already been developed and marketed by someone else.

Of course, all this ended up in litigation, which has gone on for years now. There are all sorts of issues – you have the separate court cases with Lilly (LLY) and Amgen (AMGN), for one, and then there’s the question of whether Ariad’s patent is valid at all. I’ve chronicled some of the twists and turns – Lilly, for example, lost the first round in court (to my, and no doubt their, disbelief).

But the latest news is much more to my liking. Here’s the background: Amgen struck first in 2006, fearing a lawsuit by Ariad over the use of Enbrel – hey, it goes through NF-kappaB, so it’s fair game, right? Amgen asked for a declaration that all 203 claims of the Ariad patent were invalid. Ariad wanted that dismissed, naturally. But in September of 2006, the court turned them down, saying that Amgen did indeed have grounds to sue, since internal Ariad presentation documents specifically mentioned targeting Enbrel (and another Amgen product, Kineret) as part of their business strategy. (The court also took a moment to point out that had these documents not turned up, Ariad would have gotten its desired dismissal right there.)

Ariad followed up by saying that they’d done no work related to whether the Amgen drugs infringed its patent, but they were going to do so now, by gosh, and in April 2007 they added a counterclaim that Amgen had indeed infringed 22 of the claims. (They later revised that down to nine.) By January of this year, they’d dropped the Kineret part of the case and cut the list of claims down to seven.

But the court found, in a summary judgment, that Amgen had indeed not infringed the Ariad patent. The use of Enbrel, they ruled, falls outside the scope of Ariad’s claims – mainly because all of Ariad’s claims related to reducing NF-kappaB activity inside the cell, and Enbrel acts on TNF-alpha exclusively outside the cell and never enters cells at all. Ariad has no case for infringement.

But there was another ruling, which I found quite interesting, and want to go into in detail. During this litigation, Amgen had proposed a broad covenant with Ariad not to sue them, and Ariad responded that sure, they’d sign that – but only covering Enbrel and Kineret. They reserved the right to sue at some future date about something else, you see.

Amgen rejected this idea, but Ariad went ahead and publicly declared that they’d abide unilaterally by their proposal – and then they turned around and asked the court to butt out of the original Amgen motion to invalidate all 203 claims of their patent, on the grounds that their covenant deprived the court of jurisdiction to consider the request. After all, they said, the only issues here were Enbrel and Kineret, and they’d promised not to sue Amgen over those, anyway! (Now you see why Ariad would go to the trouble of entering into a covenant with, basically, themselves).

Amgen didn’t go for that at all, saying that they were trying, once and for all, to settle the issue of whether Ariad could sue them on any ground related to the original patent – neglecting, as far as I can tell, to append the phrase delenda est Cartago to their filing. They disparaged Ariad’s maneuver as a last-ditch attempt to avoid arguing about invalidity and unenforceability, and said that they had no interest in leaving Ariad’s patent issues open and being sued later on at Ariad’s convenience. I’m paraphrasing here from the court documents, but not by very much, I have to tell you. There’s a distinctly irritated tone to most of the filings in this case.

The court went for Ariad on part of this, saying that Amgen’s potential pipeline of drugs and Ariad’s possible lawsuits didn’t amount to a real controversy – not compared to the other two products, which after all had been specifically mentioned in Ariad’s internal documents. Amgen’s attempts to go on with its invalidity claims were no longer on the table. But, as the latest document goes on to say, “The court reaches the opposite conclusion with regard to Amgen’s declaratory judgment claim of unenforceability”. The court held that it did indeed have jurisdiction to hear that part of the case.

Amgen’s line of argument was inequitable conduct – that when Ariad’s patent was filed, the parties involved had not met the “candor and good faith” requirement to disclose all known information related to patentability. They claimed this both for the initial filing and for the PTO’s re-examination of the patent, but it’s the latter that was an issue in this latest ruling. Ariad had filed declarations by two expert witnesses, Inder Verma and Thomas Kadesch, during that process. Amgen claims that Verma’s statement is misleading, and that Ariad didn’t point out that he’d published articles that appear to contradict his own statements. And as for Kadesch, he was deposed by Amgen in the course of another trial that they were involved in (vs. Roche (RHHBY.PK)), and they claim that he recanted testimony that he’d given for Ariad in the Lilly trial, which was used by Ariad in their dealings with the PTO. (Amgen apparently had to pry the Kadesch’s reversal documents out of Roche with a subpoena.)

Ariad did finally get around to submitting all these details to the PTO, but only during the course of 2007 and 2008, after the Amgen legal wrangling was underway. And Amgen claims that they dumped most of the really hot stuff in with a pile of other things, so as not to call attention to any of it.

As it turns out, the court found that Ariad had behaved properly with respect to the Kadesch documents – but the Verma stuff was another matter. In his statement for Ariad, Verma said several times that the actions of glucocorticoids through NF-kappaB were poorly understood, not known, etc. But his own articles concluded that glucocorticoids repressed NF-kappaB-mediated transcription, making those statements hard to reconcile.

If this was indeed evidence of inequitable conduct, the case all turned on the criteria worked out in a previous case (Rohm and Haas) on whether Ariad had voluntarily submitted this later evidence to the PTO. The court found that there was no evidence for that, that Ariad had only disclosed these documents under threat of Amgen’s litigation, and that Amgen’s motion for (partial) summary judgment on equitable conduct was thus granted.

So not only does Ariad have a ruling that interprets its claims in a way it doesn't like (and lets Amgen off the hook, besides), it also has one that raises significant concerns about inequitable conduct, and calls the entire enforceability of its patent into question. Not a good day for them - but a good day for common sense.

Comments

[hoopdreamer...:]

Any biotech ceo worth their salt would spend shareholder money developing drugs not suing people. Its just such a waste.

2008 Sep 25 11:37 AM