Regeneron Pharmaceuticals, Inc. v. Merus B.V.
Filing
423
OPINION AND ORDER: For the reasons set forth in this Opinion and order, the Court finds that Regeneron has engaged in inequitable conduct in connection with prosecution of the 018 Patent. The parties shall confer on a form of order of judgment and file either a joint proposed order or competing proposed orders within fourteen (14) days. The Clerk of Court is directed to terminate this action. (Signed by Judge Katherine B. Forrest on 11/2/2015) (jp)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
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:
REGENERON PHARMACEUTICALS,
INC.,
:
:
Plaintiff,
:
Counterclaim-Defendant, :
:
-v:
:
MERUS B.V.,
:
:
Defendant,
:
Counterclaim-Plaintiff. :
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USDC SDNY
DOCUMENT
ELECTRONICALLY FILED
DOC #: _________________
DATE FILED: November 2, 2015
14 Civ. 1650 (KBF)
OPINION & ORDER
KATHERINE B. FORREST, District Judge:
On March 11, 2014, Regeneron filed twin patent infringement actions:
one against Merus B.V. (“Merus”), a company based in the Netherlands, and
another against Ablexis LLC (“Ablexis”). (See ECF No. 1.) In short complaints,
each consisting of a few substantive paragraphs, Regeneron accused both companies
of infringing U.S. Patent No. 8,502,018 (“‘018 Patent”).1 Merus answered and
counterclaimed, arguing that the ‘018 Patent was unenforceable due to Regeneron’s
conduct during patent prosecution. (See ECF Nos. 72, 225.) This litigation ensued.
Following issuance of this Court’s opinion on claim construction, (ECF No. 210)
Regeneron stipulated that its infringement claim as to Merus2 must fail if the
Court’s constructions withstand challenge on appeal. (ECF No. 271.) Thereafter,
Merus moved to dismiss the complaint as failing to fulfill basic notice requirements set forth in
Rule 8 of the Federal Rules of Civil Procedure and the standard set out by the Supreme Court in Bell
Atlantic Corp. v. Twombly, 550 U.S. 544 (2007). Though agreeing that the complaint was sparse, the
Court nonetheless found it was minimally sufficient and denied the motion. (ECF No. 71.)
2 Ablexis settled with Regeneron prior to claim construction.
1
1
all that remained was Merus’s counterclaim for inequitable conduct. On June 9-15,
2015 the Court held a bench trial on that claim. Set forth below are the Court’s
findings of fact and conclusions of law.
Based on substantial evidence adduced at trial – as well as certain instances
of Regeneron’s litigation conduct – it 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.
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 (“PTO”). As it
turns out, the invention that Regeneron’s technical expert, Marjorie A. Oettinger,
Ph.D., described is interesting and might in fact lead to the discovery of
therapeutically useful antibodies, but it is simply not the invention disclosed in the
‘018 Patent.
It is unfortunate that this case has been marked by troubling litigation
tactics, and doubly so as the purpose of this final proceeding was to determine
whether Regeneron had engaged in inequitable conduct or affirmative egregious
misconduct during patent prosecution. Troubling litigation tactics were on display
2
soon after this case was filed and continued into the trial. Based upon the Court’s
assessment of the evidence, it 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.
I.
THE ‘018 PATENT
Regeneron’s ‘018 Patent is the subject of this proceeding. Entitled “Methods
of Modifying Eukaryotic Cells,” it is one of a number of patents and/or related
patent applications in the same family and sharing some or all of the same
specification. (See ‘018 Patent,3 “Related U.S. Application Data.”) The original
application to which the ‘018 Patent traces back was initially filed on February 16,
2001. (Id.) As discussed in several parts of this Opinion, this date – February 16,
2001 – plays an important role in defining the invention; that is, in determining
what it is and what it simply cannot be.
Regeneron describes the invention disclosed in the Patent as a mouse with
normal immune response useful for discovering therapeutic antibodies. According
to Regeneron, mice described by prior art had deficient immune response. The
invention involves, in part, the targeted insertion of unrearranged human variable
region DNA segments into an endogenous mouse (murine4) immunoglobulin (“Ig”)
locus. According to Regeneron, this would result in a mouse with human variable
3
4
The ‘018 Patent is PX 1.
Of, relating to, or involving mice.
3
regions and mouse constant regions, that is, a “chimeric” or “reverse chimeric”5
mouse. Notably, and as described further below, Regeneron’s view of the invention
necessarily presumes a multi-step process. The process could unfold in two
different ways. It could be achieved by making two targeted insertions into the
same mouse Ig loci, one of human heavy chain variable regions and a subsequent
and further targeted insertion of human light chain variable regions. Or,
alternatively, it could be achieved by initial insertion of heavy and light chain
variable regions into two separate mice and the subsequent breeding of the two
mice, resulting in a mouse with both human heavy and light chain variable regions.
An aspect of this targeted insertion is, according to Regeneron, placement at
a precise point: the human variable region gene segments must be adjacent to the
mouse constant regions. Regeneron’s technical expert, Dr. Oettinger, refers to this
as “functional” linkage. In addition, Regeneron asserts that a necessary part of this
invention includes retention of mouse regulatory regions, specifically the
transmembrane and cytoplasmic tail. Regeneron asserts that the commercial
embodiment of the invention is its VelocImmune mouse. These aspects of the
invention are important to the issues here before the Court. A differently defined
invention runs directly into the prior art Merus claims Regeneron failed to disclose
during patent prosecution.
The term “chimeric” comes from Greek mythology, in which the Chimera was a fire-breathing
monster made up of parts from different animals: a lion’s body, topped with dual lion and goat heads,
and ending in a serpent for a tail. In usage today the term typically refers to something comprising
more than one animal. The term “reverse chimeric” here means having the mouse as the primary
animal to which the human DNA is added; the animal is “chimeric” as it is composed of DNA from
two animals, and “reverse chimeric” as it is composed primarily of non-human DNA to which human
DNA has been added.
5
4
According to Merus, the invention (and claim 1 in particular) does not contain
all of the limitations Regeneron now asserts. As an initial matter, it is not limited
to mice with entirely human variable regions and entirely mouse constant regions,
but may include those with combined human and mouse variable regions (that is,
there is an insertion of human variable, but no deletion of the mouse, or insertion of
human heavy chain leaving the mouse light chain, or vice versa). In addition,
according to Merus, although claim 1 specifies that the insertion must occur into the
Ig locus, it does not require insertion at the particular point within the locus
(adjacent to, but neither overlapping with nor short of, the mouse constant region)
as Regeneron now asserts; and this lack of specificity could lead to a mouse with an
impaired immune response. Finally, according to Merus, the VelocImmune mouse,
which Regeneron represented to the PTO was the commercial embodiment of the
‘018 Patent, did not exist in February 2001; Regeneron only succeeded in making it
several years later, after a number of failed attempts – and then by a process
different from that disclosed in the ‘018 Patent.
II.
DESCRIPTION OF THE TECHNOLOGY IN THE PATENT
According to the specification of the ‘018 Patent, the method used to engineer
this chimeric mouse involves “utilizing large DNA vectors to target, via homologous
recombination, and modify, in any desirable fashion, endogenous genes and
chromosomal loci in eukaryotic6 cells.” (‘018 Patent, “Abstract.”) The large DNA
“Eukaryotic cells” are cells that have different compartments that serve distinct roles; for instance,
chromosomes are housed within the cell nucleus. (Clynes Decl., ECF No. 105, p. 11, n. 2.) Eukaryotic
6
5
vectors used in this process are defined in the specification as “LTVECs” – that is,
large targeting vectors for eukaryotic cells. LTVECs are “derived from fragments of
cloned genomic DNA larger than those typically used by other approaches intended
to perform homologous targeting in eukaryotic cells.” (Id., 9:39-42.) A “targeting
vector” is “a DNA construct that contains sequences ‘homologous’ to endogenous
chromosomal nucleic acid sequences flanking a desired genetic modification(s). The
flanking homology sequences, referred to as the ‘homology arms’, direct the
targeting vector to a specific chromosomal location within the genome. . .” (Id., 8:669:4.)
cells are the building blocks of humans, mice, and other higher order life; they are distinguished
from bacteria which have no cellular compartments. (Id.)
6
All of the figures in the specification show versions of homologous
recombination with LTVECs of various types and sizes, none smaller than 20
kilobases (“kb”). For instance, Figures 1 and 2 in the specification show a DNA
“modification cassette” (or insert) being transferred by homologous recombination
into a large targeting vector in a mouse’s genome:
(Id., Fig. 1.)
7
(Id., Fig. 2.)
8
Figures 4A-4D of the ‘018 Patent show a human insert in a LTVEC of 200300 kbs:
The specification states that “use of LTVECs provides substantial advantages
over current methods” of homologous recombination. (Id., 1:37-38.) “LTVECs can
be more rapidly and conveniently generated from available libraries of large
genomic DNA fragments (such as BAC and PAC libraries7) than targeting vectors
made using current technologies.” (Id., 1:40-43.) “The present invention” is
described as providing for “a rapid, convenient, and streamlined method for
BAC and PAC are acronyms that respectively stand for “bacterial artificial chromosome” and “P1derived artificial chromosome.”
7
9
systematically modifying virtually all the endogenous genes and chromosomal loci
of a given organism.” (Id., 1:51-54.)
The specification also states that “[i]n accordance with the present invention,
Applicants provide novel methods that enable the use of targeting vectors
containing large regions of homology so as to modify endogenous genes or
chromosomal loci in eukaryotic cells via homologous recombination. Such methods
overcome the [limitations in the prior art.]” (Id., 2:64-3:2.)
In the “Summary of the Invention,” the specification states, “In accordance
with the present invention, Applicants have developed a novel, rapid, streamlined,
and efficient method for creating and screening eukaryotic cells which contain
modified endogenous genes or chromosomal loci.” (Id., 3:11-14.) The method uses
LTVECs, introduces them into eukaryotic cells to modify the endogenous
chromosomal locus of interest, and analyzes the cell with an assay8 for modification
of the allele9 (“MOA assay”). (Id., 3:15-25.) The ‘018 specification references thirty
(30) preferred embodiments, including several which are far broader than the
invention Regeneron now describes. For instance,
8
9
“A preferred embodiment of the invention is a method for
genetically modifying an endogenous gene or chromosomal locus in
eukaryotic cells [using LTVECs].” (Id., 3:27-30.)
“Yet another preferred embodiment is a genetically modified
eukaryotic cell that is produced by the method of the invention.”
(Id., 4:6-8.)
An assay is a quantitative or qualitative test of a substance.
An allele is one of two or more versions of a gene.
10
Certain embodiments make clear that deletions and insertions of genetic
sequences are separate and distinct concepts, and that one is not assumed within
the other (that is, an insertion of a genetic sequence does not necessarily imply a
deletion of a sequence). For instance,
“Another embodiment of the invention is a method wherein the
genetic modification to the endogenous gene or chromosomal
locus comprises deletion of a coding sequence, gene segment, or
regulatory element; alteration of a coding sequence, gene
segment, or regulatory element; [or] insertion of a new coding
sequence, gene segment, or regulatory element . . .” (Id., 3:40-43
(emphasis added).)
“An alternative embodiment of the invention is a method
wherein the alteration of a coding sequence, gene segment, or
regulatory element comprises a substitution, addition, or fusion .
. .” (Id., 3:48-51 (emphasis added).)
“Also preferred is a transgenic mouse having a genome
comprising entirely human heavy and light chain variable
region loci operably linked to entirely endogenous mouse
constant region loci such that the mouse produces a serum
containing an antibody . . . ; a transgenic mouse containing an
endogenous variable region locus that has been replaced with an
homologous or orthologous human variable locus, such mouse
being produced by a method comprising [obtaining and using
LTVECs].” (Id., 7:24-38 (emphasis added).)
Other embodiments directly contradict Regeneron’s description in this
proceeding of its invention as requiring a mouse with entirely human variable
regions and entirely mouse constant regions. For instance,
11
“One embodiment of the invention is a method of replacing, in
whole or in part, in a non-human eukaryotic cell, an endogenous
immunoglobulin variable region gene locus with an homologous
or orthologous10 human gene locus comprising [using the LTVEC
process to] introduce[e] the LTVEC … into the eukaryotic cells
to replace, in whole or in part, the endogenous immunoglobulin
variable gene locus…” (Id., 5:44-60 (emphasis added).)
“Another embodiment of the above method is a method wherein
[certain steps] are repeated until the endogenous
immunoglobulin variable region gene locus is replaced in whole
with an homologous or orthologous human gene locus.” (Id.,
6:11-15 (emphasis added).)
“Another embodiment of the method is one in which the
immunoglobulin variable gene locus is a locus selected from the
group consisting of a) a variable gene locus of the kappa light
chain; b) a variable gene locus of the lambda light chain; and c) a
variable gene locus of the heavy chain.” (Id., 6:16-20 (emphasis
added).)
“Also preferred is an embryonic stem cell wherein the mouse
heavy chain variable region locus is replaced, in whole or in
part, with a human heavy chain variable gene locus; an
embryonic stem cell of claim wherein the mouse kappa light
chain variable region locus is replaced, in whole or in part, with
a human kappa light chain variable region locus; an embryonic
stem cell wherein the mouse lambda light chain variable region
locus is replaced, in whole or in part, with a human lambda light
chain variable region locus; and an embryonic stem cell wherein
the heavy and light chain variable region gene loci are replaced,
in whole, with their human homologs or orthologs.” (Id., 7:6-18
(emphasis added).)
“Homologous” means “two or more nucleic acid sequences that are either identical or similar
enough that they are able to hybridize to each other or undergo intermolecular exchange.” (‘018
Patent, 9:9-11.) An “orthologous” sequence refers to “a sequence from one species that is the
functional equivalent of that sequence in another species.” (Id., 9:51-53.)
10
12
“Yet another preferred embodiment is an antibody comprising a
human variable region encoded by the genetically modified
variable gene locus of described above; an antibody further
comprising a non-human constant region; and an antibody
further comprising a human constant region.” (Id., 7:19-23
(emphasis added).)
“Also preferred is a transgenic mouse having a genome
comprising entirely human heavy and light chain variable
region loci operably linked to entirely endogenous mouse
constant region loci such that the mouse produces a serum
containing an antibody comprising a human variable region and
a mouse constant region in response to antigenic stimulation; a
transgenic mouse having a genome comprising human heavy
and/or light chain variable region loci operably linked to
endogenous mouse constant region loci such that the mouse
produces a serum containing an antibody comprising a human
variable region and a mouse constant region in response to
antigenic stimulation…” (Id., 7:24-35 (emphasis added; note
inclusion of the word “entirely” in the first example and the
absence of that word in the second).)
Notably, the preferred embodiments are consistent with Merus’s description
of the invention and, as described below, the broadest reasonable construction of the
claims.
A.
Certain Technical Principals Relevant to this Opinion11
Technical experts retained by Regeneron and Merus testified at the trial:
Marjorie A. Oettinger, Ph.D. for Regeneron and Geoff Davis, Ph.D., for Merus. Both
have substantial expertise in their fields. The Court relies upon both in its findings
with regard to various basic technical principles relevant to the issues before the
The Court set forth a similar section on Technical Principles in its Markman decision. (ECF No.
210.) This section has been modified to reflect trial testimony and documents received into evidence
in this proceeding. Notably, Merus’s expert, Geoff Davis, Ph.D., proceeded in a similar manner in his
Trial Declaration by incorporating by reference the background technical information the Court had
previously received in connection with claim construction. (See Davis Tr. Decl. ¶ 16.)
11
13
Court.12 Where one differed from the other in a material way, several examples of
which are described in this Opinion, the Court found Dr. Davis more persuasive and
his opinions based on a more substantial foundation. All technical determinations
included in this Opinion constitute findings of fact.
The technology relating to the ‘018 Patent generally involves a method to
genetically modify mice to contain large fragments of human genomic DNA by use
of targeting vectors (described below) and assay. The goal is to produce antibodies
useful in drug discovery and, eventually, production of potentially useful
therapeutic antibodies. (Davis Tr. Decl.13 ¶ 17.) DNA is a molecule in a cell which
carries the genetic material for living organisms and is capable of self-replication
and synthesis. It consists of a double-stranded molecule that pairs in a doublehelical structure: “One end of each strand is called the 5-prime (5’) end, and the
other is called the 3 prime (3’) end.” The 5-prime and 3-prime ends define the
boundaries of a strand of DNA. One of the issues before the Court – and which was
also at issue during claim construction – is whether the metes and bounds of the 5’
end of the immunoglobulin locus was sufficiently understood as of the relevant date,
February 16, 2001. The concern is whether practicing the invention required
defining the 5’ end of the locus, which is the beginning of the variable region.
Merus asserts that without such definition, targeted insertion of a human variable
region gene segment could miss the locus altogether, or it could fall short of
See Trial Aff. of Dr. Marjorie A. Oettinger (ECF No. 345) and Trial Decl. of Dr. Geoff Davis. (ECF
No. 338); see also Trial Tran. 650:4-916:12 (Oettinger testimony) and Trial Tran. 117:3-473:4 (Davis
testimony).
13 Dr. Davis’s trial declaration was filed under seal. (See ECF No. 338.)
12
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insertion at a point that would reliably produce a useful antibody. Regeneron, in
contrast, asserts that while the precise metes and bounds of the 5’ end were not
known in 2001, enough was known as to the size of the loci to allow for practice of
the invention. As discussed below, the Court is persuaded by Merus’s expert Dr.
Davis on this point and disagrees with Regeneron.
DNA molecules are made up of chemical building blocks called “nucleotides”.
Nucleotides on the two strands of the double-helix pair with one another in
complementary units called “base pairs.” The base pairings connect the individual
DNA strands to one another to form the double-helix. The unique sequence of bases
on a given strand represents a code; a gene is a unit of DNA that includes the
sequence of bases representing the codes for the amino acids that comprise a
particular protein. In this case, the concept of kilobase pairs has some relevance.
The term “kilobase pairs” refers to a DNA strand 1,000 base pairs long. In the ‘018
Patent, a core aspect of the invention is the utilization of a large fragment of DNA –
measured in kilobase pairs – for targeted insertions.14
Genes are expressed by cells as proteins through processes commonly
referred to as “transcription” and “translation”. Before transcription and
translation, the two strands of DNA that constitute a gene unwind from their
double-helix configuration. During transcription, machinery in the cells reads the
DNA sequence of one of the DNA strands, nucleotide by nucleotide, and uses it as a
During claim construction, one issue was whether, as of February 2001, Regeneron was actually
able to successfully insert a DNA fragment of such length.
14
15
template to produce an intermediate molecule called messenger RNA (abbreviated
as mRNA). The structure of a protein gives rise to its biologic activity.
A key benefit of the invention as described in the ‘018 Patent is successful B
cell replication. “B cells” make antibodies. Antibodies are also known as
“immunoglobulins.” They are a particular type of protein with the potential to bind
specifically to foreign antigens. (Oettinger Trial Aff.15 ¶ 22.) All immunoglobulins
have a similar structure. (Id. ¶ 23.) They are typically depicted as having a
structure shaped like the letter “Y”. (See id. Fig. 1.) The Y structure consists of
four chains of amino acids: two identical light chains and two identical heavy
chains. Each light chain pairs with a partner heavy chain, and then each heavylight chain pair associates with an identical heavy-light chain pair to form the “Y”
structure. See Figure 116 below:
Each Ig heavy or light chain is composed of several regions. (Oettinger Trial
Aff. ¶ 24.) Within an immunoglobulin subunit, there are regions with extensive
amino acid sequence variations between them, which are called “variable” regions.
15
16
Dr. Oettinger’s trial affidavit was filed under seal. (See ECF No. 345.)
Figures in this opinion without a specifically identified source are not found in the ‘018 Patent.
16
(Id.) Regions that show no sequence variation within a species are called “constant”
regions. (Id.) Each heavy chain and light chain is comprised of a “constant” region
and a “variable” region. In both heavy chains and light chains of an antibody, the
region at the tip of the “Y” is the variable region. The other region on each heavy
chain and light chain is the constant region. See Figure 2:
The heavy chains are referred to by the letters of the Greek alphabet. The
heavy chains of the different classes of immunoglobulins, IgM, IgD, IgG, IgA and
IgE, are referred to as µ (mu), δ (delta), γ (gamma), α (alpha) and ε (epsilon),
respectively. (Id. ¶ 27.) Oettinger states that “a comparison of the constant regions
between different species … reveals important differences. For example, although
the amino acid sequences of the constant regions of mouse and human IgG1 have
about 70% sequence identity, there are numerous amino acid substitutions that
distinguish one from the other. These species-species features are important when
considering the functional and antigenic properties of human immunoglobulins
introduced into a different species…” (Id.)
Important to the issues before this Court is the fact that, as Dr. Oettinger
testified and as further set forth in Dr. Davis’s Trial Declaration (See Davis Tr.
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Decl. ¶ 322), replacement of an entire variable region requires at least two steps:
replacement of the heavy chain of the variable region, and replacement of the light
chain. (ECF No. 398, 674:2-19.) Insertion of an entire exogenous variable region
requires two similar insertion steps – one for the heavy chain and one for the light.
It would not matter which order such replacement or insertion was accomplished –
but it cannot be accomplished in a single step. (Id., 674:20-675:2.)
Antibodies are proteins composed of amino acids, encoded by genes composed
of DNA nucleotides. The DNA that encodes antibody variable regions is assembled
from separate gene “segments.” A gene that encodes the heavy chain variable
region of an antibody is assembled from three gene segments, named the variable
(V or VH), diversity (D or DH) and joining (J or JH) segments (the subscript “H”
indicates the gene segment that forms part of the antibody heavy chain). A gene
that encodes the light chain variable region of an antibody is assembled from two
gene segments, named the variable (V or VL) and joining (J or JL) segments (the
subscript “L” similarly indicates the light chain). These gene segments are joined
together to form contiguous variable region gene segments (V(D)J for heavy chains,
and VJ for light chains) through DNA rearrangement mechanisms. (Oettinger Tr.
Aff. ¶ 35.) The genetic structure of the immunoglobulin loci together with the
capacity of immunoglobulin DNA to (1) rearrange, (2) switch, and (3) further
mutate, allows for the production and development of a diverse antibody repertoire;
these activities may also be referred to generally as recombination, isotype
switching, and hypermutation. (Davis Tr. Decl. ¶ 22.)
18
In order to generate mice that produce humanized antibodies, the ‘018 Patent
sets out a method of integrating human genomic immunoglobulin DNA into the
mouse genome. (Id. ¶ 23.) In both humans and mice there is one gene locus
containing the genetic material used for expressing heavy chains, and two gene loci
containing genetic material used for expressing light chains. Through a process
known as V(D)J recombination, the DNA sequence encoding a variable region of an
antibody heavy or light chain is created at each Ig gene locus by selecting and
joining together one each of the many V, D and J gene segments (for heavy chains)
or V and J gene segments (for light chains) present at the locus. (Oettinger Tr. Aff.
¶ 41.) V(D)J recombination is referred to as “somatic recombination”. See Figure 3:
V(D)J recombination (i.e., somatic recombination) is part of the process of B
cell development essential to encode a complete antibody. All antibodies made by
19
one B cell are identical. (Id. ¶ 29.) Thus, in order to have a diversity of antibodies,
a diversity of B cells is required. B cell rearrangement is essential to that process.
Somatic mutations (i.e., changes in DNA sequences in B cells as opposed to
germline cells) then further act to increase the affinity of an antibody with a given
specificity. (Id.) “B cells arise in the bone marrow, where lymphoid progenitor cells
develop into ‘immature’ B cells.” (Id. ¶ 30.) During this developmental process,
rearrangements take place in the immunoglobulin genes. This is the “V(D)J
recombination” discussed above. (Id.) If a successful gene rearrangement takes
place, the B cell eventually acquires the capacity to display a “B cell receptor” on its
surface; this B cell receptor is a “membrane-bound version of an immunoglobulin.”
(Id.)
Successful rearrangement of the heavy chain locus allows the B cell to
produce a membrane-bound µ (mu) chain. (Id. ¶ 43.) In early B cell development,
the membrane-bound µ (mu) chain is the first functional Ig subunit that is
expressed: at this time, the light chain genes have not yet rearranged and the B cell
does not make the complete B cell receptor, so the B cell is not capable of specific
antigen recognition. (Id.)
At this stage, only a membrane-bound µ (mu) heavy
chain is expressed and the cell that carries it is referred to as a “pre-B cell.” (Id.)
The membrane-bound µ (mu) chain is anchored in the membrane of the pre-B cell
with the bulk of its mass facing outward. (Id. ¶ 44.) The membrane-bound µ (mu)
chain forms a complex with two so-called “surrogate” light chains and two
20
“accessory proteins;” this complex is referred to as the pre-B cell receptor (“preBCR”). (Id. ¶ 45.)
The µ (mu) region, which has both a transmembrane domain and a
cytoplasmic tail, plays an important role in this proceeding. Regeneron asserts that
a benefit of the invention in the ‘018 Patent is retention of a mouse µ (mu) region
when human (heavy and light chain) variable regions have been inserted. Merus
argues – and Davis persuasively supports this argument – that nothing in claims 15 requires retention of the murine µ (mu) region.
There are – and at the time of the invention in February 2001 there already
were – numerous methods for incorporating exogenous DNA, such as human DNA,
into mice. The first method was the insertion of a “transgene” by random
integration. A “transgene” is a DNA sequence originating from outside the host
organism. One may create a “transgenic mouse” by injecting an exogenous DNA
fragment into a fertilized mouse egg. (See ECF No. 400, 850:10-20; Davis Tr. Decl.
¶¶ 19, 59.) The DNA fragment is then incorporated into a random chromosomal
location in the genome of the embryo. The exact location where the transgene DNA
ends up in the genome is random. This process is known as “random integration”.
Random integration may result in the location of the added DNA in an area which
is more or less transcriptionally active and can also disrupt or render nonfunctional
DNA regions into which it integrates. In other words, the inserted DNA may or
may not be where you want it to be in the mouse genome.
21
Non-randomized methods of genetic modification also existed prior to
February 2001. The methods are sometimes generally referred to as “gene
targeting.” (Davis Tr. Decl. ¶ 19.) The key technique used for targeted gene
modification that had been developed before 2001 is called “homologous
recombination.” (See, e.g., id. ¶¶ 18-20.) Homologous recombination relies on a
vector (one can think of this as a “chunk”) comprised of the foreign DNA that one
seeks to insert, flanked by regions of DNA that are homologous to the desired
integration site, known as the homology arms. (Id. ¶ 19.) To facilitate homologous
recombination, the DNA sequence of interest is flanked by “homology arms;” these
arms consist of DNA fragments that are substantially the same in sequence as the
sequences that flank the target DNA sequence being replaced or augmented in the
genome. These arms allow the targeting construct to alight with the host genome to
ensure modification at the desired position. Targeted insertion directs the DNA
from the vector to integrate at a particular site (or location) without changing the
nearby regions of the host genome (this is an “insertion”), or it can direct the foreign
DNA to replace a portion of the host genome with the foreign DNA to be integrated
(“replacement” or “substitution”); this may include a deletion step. (Id.)
22
An example of targeted insertion – without deletion – is shown below in
Figure 4 as integrated DNA without removing the DNA of the targeted genome:
Insertion without deletion differs from “replacement” or “substitution” of
mouse DNA with homologous human DNA. Implicit in replacement or substitution
is the concept of removal, or possibly other inactivation, of the original gene
segment. In this way, the mouse DNA would not be present (or active) in the mouse
cell and the human DNA would be. (Davis Tr. Decl. ¶ 19.)
The ‘018 Specification teaches a method of homologous recombination
between a mouse and human in which the specific target is the immunoglobulin
locus. In the ‘018 Patent, the mouse is the host, and a portion of an homologous
human gene segment (here, some or all of the variable region) is inserted into the
mouse’s immunoglobulin locus. To do this, a “targeting vector” must be created. As
described above, a “vector” is a vehicle which holds the DNA sequence (or gene
segment) that the scientist intends to be incorporated into the mouse genome. To
23
facilitate homologous recombination, the DNA sequence of interest is flanked by
“homology arms”; these, again, are DNA fragments that are substantially the same
in sequence as the sequences that flank (or are at either end) of the target DNA
sequence being replaced or augmented in the genome. These arms allow the
targeting construct to align with the host genome to ensure modification at the
desired position. Put otherwise, to drop the gene sequence into a particular locus
you need a beginning and end that matches the beginning and end of the same
sequence in the host; and to review (because this is complicated stuff) the entire
segment is called the vector and the beginning and ends are the “arms” or
“homology arms” of that vector.
When the amino acid sequence of a protein is represented in a linear fashion,
it is represented by convention with the “amino-terminal” end on the left and the
“carboxyl-terminal” end on the right. (Oettinger Trial Aff. ¶ 28.) For nucleic acids
such as DNA, the “upstream” or “5’” (“five-prime”) portion is shown on the left and
the “downstream” or “3’” (“three-prime”) portion is shown on the right, with the
encoding sequence in the middle. (Id.)
One can think of this as a section of rope with a knot on one end signifying
the 5’ end of the locus, the middle section as a gene segment, and a knot on the far
end as the 3’ end of the locus. Thus, the immunoglobulin loci have a 5’ end and a 3’
end; in between are the heavy and light chain variable region gene segments and
the heavy and light chain constant region segments, with the variable segments
arranged at the 5’ end and the constant segments toward the 3’ end. One can think
24
of the 5’ and 3’ ends as the boundary lines of the locus. Outside of the 5’ and 3’ one
is outside of the locus; inside the boundary lines are all of the various regions
including the variable regions (heavy and light) and constant regions (heavy and
light). Thus, knowing the 5’ and 3’ defines the playing field – but where on the
playing field one desires to place the “ball” (or gene segment), if one desires a
specific location, requires additional information.
Continuing with our playing field analogy, to place the ball at the 50 yard
line, one needs to know where that is. Of course, one also needs to know whether
the coach cares where on the field the ball is placed, or whether the intent is just to
get it onto the field. The “coach” (scientist) may be indifferent. This concept is
important for the invention at issue in the ‘018 Patent – both because Merus claims
that the metes and bounds of the 5’ was unknown in February 2001, and because
Regeneron now claims that the location within the locus (in our analogy, the precise
point on the playing field) at which the targeting needs to occur, is quite specific. As
discussed below, Regeneron asserts (through Dr. Oettinger) that the insertion of the
human DNA segment must occur distal to, and upstream of, the 5’ such that it is
next to, but not within, the area which contains the mouse constant regions.
Thus, performing targeted insertion of variable gene segments into the
immunoglobulin locus of a mouse requires choosing a homology arm upstream (5’) of
the chromosomal fragment, and a homology arm downstream (3’) of that fragment.
If homologous recombination occurs within the boundaries established by the
25
homology arms, the insertion has been accomplished. Figure 4 is worth repeating
here to illustrate this:
Notice that in the figure above, depicting an example of insertion, the
transgene (that is, the gene from the outside human organism) has been added into,
but has not replaced, the existing genes in the mouse. As discussed, a separate
process would be required to delete the pre-existing homologous segment, or to
inactivate it.
Over time, scientists skilled in the art have found that human gene segments
inserted into a mouse genome, and into the immunoglobulin gene in particular, are
able to rearrange and thereby produce a broad spectrum of VDJ and VJ regions (for
heavy and light chains) that are expressed in antibodies.
The method set forth in the ‘018 Patent may result in genetically modified
mice that can produce antibodies useful in drug discovery and downstream
production of potentially useful therapeutic antibodies. (Davis Tr. Decl. ¶ 17.) As
discussed below, that same method may also, however, produce a mouse capable of
26
producing inferior or even useless antibodies.17 This might occur if (1) the insertion
occurs in the gene (e.g. somewhere on the playing field) at a point that is not next to
the constant region – perhaps even within the constant region; (2) the inserted
human gene segment is only one portion of the variable region (e.g. heavy but not
light chain or vice versa), or (3) the homologous mouse gene segment is not deleted
or inactivated, but instead continues to exist within the locus.
It should be clear by this point that Drs. Oettinger and Davis do not agree on
various technical aspects of the invention. Indeed, they disagree on certain
fundamental points. In making its determinations herein, the Court has read the
material submitted by each and had the opportunity to see them on crossexamination and redirect, and also to pose certain questions itself. While the Court
does find Dr. Oettinger experienced in the relevant area, the Court credits Dr.
Davis’s views on technical aspects in which they differ, including on the invention.
That is due to the reasoned basis for Dr. Davis’s views, the evidence he brought to
bear to support his views, and how he responded on cross examination. As stated
above, the Court’s technical statements are, therefore, findings of fact.
Among their disagreements is whether insertion of the human V-D-J/V-J
(that is, both heavy and light chain variable regions) and deletion of the homologous
mouse sequences leaves intact all of the sequences, including regulatory sequences,
necessary to enable the production of useful antibodies. Dr. Oettinger asserts that
it does, and Dr. Davis disagrees. Dr. Davis testified credibly that “[t]here are …
As Dr. Davis notes, creation of an antibody is not a requirement of claims 1-5 of the ‘018 Patent.
(Davis Tr. Decl. ¶ 44.)
17
27
important differences between the loci in organization, regulation and existence of
embedded genes associated with other functions in the organism, which do not
comport with the assertion” that all necessary sequences for proper transcription,
recombination and/or class switching are left intact. (Id. ¶ 27.) One example
highlights the importance of this disagreement.
Following its submission of the ‘018 Patent Application, Regeneron learned
that embedded in the mouse heavy chain Ig locus there are genes (referred to as
ADAM6) that are important for mouse fertility. If those genes are deleted according
to the instructions set forth in the ‘018 Patent (and as referenced in Figures 4A-D of
the ‘018 Patent), the resulting mouse will be infertile or have impaired fertility. (Id.
¶ 28; DX 159, at 734, 737; see also DX 3, U.S. Patent No. 8,642,835 at 1:15-28.)
28
Another point of difference concerns the identity of light and heavy chains.
For instance, Dr. Davis takes issue with Dr. Oettinger’s assertion that a naturally
occurring Ig molecule always has two identical light chains and two identical heavy
chains. Dr. Davis states, with support, that (for example) the IgG4 is “inherently
unstable” and “exchange of HL pairs may occur resulting in different heavy chains
and/or light chains in the circulation.” (Davis Tr. Decl. ¶ 25.) He further states,
with support, that while Dr. Oettinger asserts that the unrearranged variable
region gene structures of heavy and light chains are similar, they are not always so.
(Id. ¶ 27.) For instance, mouse heavy and light chain Ig loci organization and
content are different. “[T]he mouse endogenous lambda locus has regulatory
elements, and constant regions sandwiched between V and J gene segments.” (Id. ¶
29.)
29
According to Dr. Davis, and the Court credits his testimony in this regard, if
one skilled in the art were to follow the targeting strategy set forth in the ‘018
Patent for the lambda locus, he or she would be removing mouse constant regions
and regulatory elements within that locus. (Id. ¶ 30.) This conflicts with Dr.
Oettinger’s assertion that the invention requires maintaining the totality of the
mouse constant region intact. (Id. ¶ 31.)18
III.
PROSECUTION HISTORY OF THE ‘018 PATENT
U.S. Patent Application No. 13/164,176 (the ‘176 Application), entitled
“Method of Modifying Eukaryotic Cells,” was filed on June 20, 2011. (See ‘018
Patent.) The application issued as U.S. Patent No. 8,502,018 (the ‘018 Patent) on
August 6, 2013, to inventors Drs. Andrew J. Murphy and George D. Yancopoulos,
(Id.) and was assigned to Regeneron.
One of the more curious moments in the trial was when Dr. Oettinger testified that she had been
instructed not to talk to the inventor – Dr. Andrew J. Murphy – about the ‘018 Patent. While
lawyers understandably try to prevent or limit interactions among trial witnesses to avoid claims
that testimony is coordinated, that ought to be balanced against providing an expert with access to
an important source of information as to how the invention developed and the intended scope of the
claims, etc., namely the inventor himself.
18
30
As originally filed, claim 1 of the ‘176 Application describes “A genetically
modified mouse, comprising in its germline human unrearranged variable gene
region segments inserted at a mouse immunoglobulin locus.” (DX 2 at 44.) But for
the later inclusion of the word “endogenous”, this is identical to claim 1 of the ‘018
Patent as issued.
On January 26, 2012, the PTO issued a Non-Final Office Action rejecting
claims 1-19 of the ‘176 Application as being anticipated by a Lonberg reference,
2006/0015957 (Id. at 128-39.) That Office Action stated, in part:
Lonberg and Kay teach heterologous unrearranged immunoglobulin
human heavy and light chain transgenes useful for producing
transgenic mice…and transgenes are typically integrated into host
chromosomal DNA, into germline DNA.
…
Lonberg and Kay teach the production of chimeric human variable
region/mouse constant region antibodies through transswitching…thus the mouse does not comprise a human
immunoglobulin constant region gene. (Id. at 131-32.)
On July 26, 2012, Regeneron’s Dr. Tor Smeland, in-house counsel responsible
for prosecuting that application and others in the same family in the United States
and Europe, replied to this Office Action. He argued, inter alia, that unlike the ‘176
Application, Lonberg teaches random and not targeted insertion:
Lonberg does not disclose a mouse comprising in its germline human
unrearranged variable region gene segments inserted at a mouse
immunoglobulin locus. Instead, Lonberg discloses transgenes that are
apparently randomly inserted at (unknown) loci. Lonberg simply lacks
description of the claimed chimeric locus of claim 1. Amended claim 11
and amended claim 20 also recite a chimeric endogenous locus, which
is not disclosed in Lonberg. Thus, regardless of whether Lonberg
disclosed chimeric human variable/mouse constant antibody proteins,
31
Lonberg does not anticipate the claims because a disclosure of transswitching does not disclose … endogenous mouse loci that are modified
as claimed…
…
The claimed method does not represent a selection from predictable
solutions, i.e., the claimed method was not “obvious to try” at the time
it was filed. An obvious to try argument assumes a design need or
market pressure to solve a recognized problem in order to achieve an
anticipated success. The art never recognized (1) that there was a
“problem” to be solved in making antibodies from an endogenous
mouse locus, or (2) that there was a design need or market pressure to
achieve success at modifying an endogenous mouse immunoglobulin
locus to make a chimeric endogenous locus. (Id. at 160-61, 163
(emphasis added).)
On October 11, 2012, the PTO mailed a Final Office Action, rejecting the
pending claims of the ‘176 Application. The Final Office Action maintained the
rejection of claims 1-19 as anticipated by Lonberg. (Id. at 180.)
In a January 11, 2013 Reply to the Final Office Action, Regeneron amended
claim 1 to include the additional limitation that the human unrearranged variable
region gene segments would be inserted at “an endogenous” mouse immunoglobulin
locus. (Id. at 202.) In connection with that amendment Regeneron stated:
The Lonberg paragraphs cited by the Examiner merely disclose that
human transgenes for making human antibodies were mentioned in
the art. None of the cited paragraphs suggest or even hint at placing
unrearranged human immunoglobulin gene segments at an
endogenous mouse locus, much less a functional endogenous mouse
locus. The cited portions of Lonberg leave no doubt whatsoever that
the Lonberg mouse construction instructions were to build a transgenic
mouse that makes fully human antibodies from transgenes that are
distant from endogenous mouse immunoglobulin loci; i.e., they are
synthetic loci randomly inserted into the mouse genome at a locus
distant from any functional mouse immunoglobulin locus. Indeed, as
is described in detail elsewhere in Lonberg, the Lonberg transgenic
mouse requires that endogenous mouse immunoglobulin loci (both
heavy and light chain loci) must be rendered non-functional so as to
32
allow the fully human immunoglobulin transgenes to make fully
human antibodies. There is absolutely no hint or suggestion in
Lonberg to employ a functional endogenous mouse locus having
inserted unrearranged human immunoglobulin variable region gene
segments in the functional locus. (Id. at 204-05.)
The reply also represented that the VelocImmune mouse is the commercial
embodiment of the invention:
However, regardless of whether the Examiner has made a prima facie
case of obviousness with respect to claim 20, Applicants submit that
claim 20 is patentable because the claimed mouse exhibits features
entirely unexpected in lights of the teachings of prior art (e.g.,
Lonberg, Brüggemann, Kawasaki, and Popov). The features of mice
having disabled endogenous immunoglobulin loci and comprise
transgenes that make antibodies with human variable domains have
been disclosed in peer-reviewed publications disclosed in the
information disclosure statement filed in this application, dated 20
September 2011. The claimed mice, an embodiment of which is
known in the art as a VELOCIMMUNE humanized mouse,
perform surprisingly and unexpectedly better than mice with disabled
endogenous loci that express antibodies from randomly inserted
transgenes (as in all of the references cited by the Examiner). (Id. at
209 (emphasis added).)
Attached to Regeneron’s reply was a slide presentation (id. at 214-32) that
Dr. Smeland provided to the PTO, and which he and Brendan Jones, an outside
patent attorney retained to represent Regeneron in the final stages of prosecution of
the Patent, relied on in a meeting with the PTO. (See id. at 290.) That
presentation contains information which Merus asserts is false and was known to
be false at the time. It concerns the VelocImmune mouse to which Dr. Smeland’s
January 2013 reply referred.19 Various figures in that presentation describe ways
This presentation forms the basis of Merus’s “egregious misconduct” claim. In this portion of the
Opinion the Court reviews that presentation in connection with its role in the chronology of later
prosecutions. The Court returns to the presentation again later in this Opinion when discussing the
“egregious misconduct” claim in particular.
19
33
in which the VelocImmune mouse was made. These figures are consistent with the
presentation’s assertion that the VelocImmune mouse was “Created only by virtue
of VelociGene & VelociMouse technologies.” (Id. at 215.)
As discussed more fully below, this Court agrees with Merus that these slides
provide certain misleading and inaccurate information. First, as of February 2001,
the VelocImmune mouse did not exist – Regeneron had been unable to make it.
(See, e.g., DX 14520; REGN-AM-10055694.) Yet the presentation suggests it did. In
addition, on slide 10, a figure depicts the locus construction for the VelocImmune
mouse. It indicates that Regeneron replaced a 3 mb segment with a 150 kb segment
in a single step; that is, that both insertion and deletion occurred simultaneously.
(DX 2 at 224.) This was not in fact the process used to produce the VelocImmune
mouse. (Davis Tr. Decl. ¶ 279.) As discussed above, to insert both human heavy
and light chain variable regions requires two steps (or a breeding step), and a third
step is required to delete or inactivate the homologous mouse sequence in order to
obtain therapeutically useful antibodies.
Moreover, in February 2001 (and for a substantial number of years
thereafter), Regeneron had not succeeded in inserting and deleting a portion of
mouse IgH DNA that was over 200 kb. (See, e.g., DX 145; REGN-AM-10055694.)
Nevertheless, the ‘018 Patent depicts this in Figure 4 and the presentation indicates
that insertion and deletion on this scale had occurred. Figure 4 of the ‘018 Patent
Regeneron has argued that references to the contents of this exhibit should be redacted from this
Decision. The Court disagrees. The contents of DX 145 were thoroughly discussed in open court
during the trial and in Dr. Davis’s Trial Declaration. The Court considers the contents of this exhibit
relevant to this Decision and thus includes them without redaction.
20
34
shows a replacement of approximately 200-300 kb of human immunoglobulin DNA
for mouse immunoglobulin DNA. (‘018 Patent at Fig. 4).
In addition, the presentation discusses the ability of the VelocImmune mouse
to preserve the transmembrane and cytoplasmic DNA of the endogenous mouse
immunoglobulin locus as among its benefits over prior art mice. (DX 2 at 219, 222.)
The presentation discusses the preservation of these regions as the “VelocImmune
Hypothesis.” (Id. at 226.) But neither the claims nor the specification contains such
a limitation. (See ‘018 Patent, 3:27-8:3, 29:24-30:64.) Moreover, this concept was
not novel. One of the references Regeneron had not disclosed to the PTO (and at
issue in this proceeding), Zou, in 1994 disclosed the preservation of mouse constant
cytoplasmic and transmembrane domains and stated that the mice produced
humanized antibodies “at the same level and efficiency as wild-type mice produce
murine IgG1 antibodies.” (DX 72, Zou, et al. (1994) at 1099.) These undisclosed
results undercut the claims of the VelocImmune mouse’s superiority found in Dr.
Smeland’s January 2013 presentation, which extolled “Normal variable region
usage and junctional diversity,” as well as “Normal numbers and distribution of B
cells in spleen and lymph node” and “Normal B cell differentiation in bone marrow.”
(DX 2 at 227; Davis Tr. Decl. ¶ 349.)
Dr. Andrew Murphy of Regeneron was one of the authors (but not presenters)
of the slides that were provided to the PTO during patent prosecution. Prior to
creating the January 2013 slide deck, Dr. Murphy had been told by another
pioneering scientist in the field who had been on Regeneron’s Scientific Advisory
35
Board, Dr. Frederick W. Alt, that assertions that VelocImmune mice demonstrated
no major defects in B cell differentiation “could be a little misleading.” (DX 223 at
10039849; DX 111 REGN-AM-00061940) Dr. Alt shared this comment in an August
15, 2011 message that provided comments on a manuscript Dr. Murphy had sent
Dr. Alt and others the prior March. In the March email, which was titled
“VelocImmune manuscripts,” Dr. Murphy had told the recipients they were “listed
as a co-author in one or both of the enclosed manuscripts,” and asked for any edits.
(DX 112.)
In his comments on August 15, 2011, Dr. Alt responded to an assertion in the
manuscript that read “No major defects were observed in B cell differentiation in
any of the VelocImmune mice. The introduction of human IgH variable segments
does not appear to affect either the pro B to pre-B transition nor do human IgK
variables affect the proB to B transition.” (DX 223 at 10039848.) Dr. Alt wrote
that, in his view, this statement was “correct but perhaps could be a little
misleading.” (Id. at 10039849.) He explained that
when we looked at bone marrow BM there was a profound block in the
pro-B and pre-B transition, suggesting that there is significant
selection/expansion of the 3 human VH locus to get a normal
percentage of B cells in the periphery.… [I]n reality if you have too few
human VH then you may have impaired development and therefore
the number of VHs is important, but once you have a certain number
of VH genes (for example 18 in Velcoimmune), there is no obvious
developmental impairment.” (Id.)
Another recipient of that same email, Dr. Klaus Rajewsky, also provided
comments to Dr. Murphy. He advised Dr. Murphy that “[s]ince the first paper deals
in depth with the issue of replacing mouse by human immunoglobulin gene
36
segments, it may be appropriate to quote the first paper(s) demonstrating such
replacements, which were actually done in my lab almost 20 years ago. The
references are attached.” (DX 113.) One of the attached references was the Zou
reference that is alleged to be one of the Withheld References in this proceeding.21
Having received this information from both Drs. Alt and Rajewsky, and
without any evidence in the record suggesting his colleagues’ comments were
unfounded or incorrect, Dr. Murphy nevertheless assisted in authoring the
presentation to the PTO that continued to assert that the VelocImmune mouse with
3 VH gene segments was “normal” meaning “identical to wild-type mouse
littermates,” ignoring Dr. Rajewsky’s prior lab work and the Zou publications. (DX
2 at 227.)22
Dr. David Valenzuela, a recipient of both Dr. Murphy’s email and Dr. Rajewsky’s response, sent a
copy of both to Venus Lai (Regeneron’s Executive Director of VelociGene Operations and
Trangenics), stating “Venus, this is becoming a bit of an embarrassment, don’t you think?” (DX 120;
ECF No. 241 ¶ 93.) Lai responded:
“Very embarrassing…indeed!! I have to comment that I don’t always trust what Drew said or his
ideas…I found he often quoted that wrong paper and said the wrong things and no one ever
corrected him?! It is really bad that at his level, he should be hold [sic] accountable to the
information he provides because everyone takes his words for real. I did correct him a couple of
times in the past (when we met 1:1) but I have given up because there’s no point to correct him when
it did nothing. I found that in general, some old-timers at Regeneron are not well read and tend to
just open their mouths and make big statements as though we are the first (but often these ideas are
just copy-cat).” (DX 120 at 10332541; ECF No. 241 ¶ 94.)
Regeneron has argued that the content of this email should be redacted on the basis of possible
reputational harm. The Court disagrees. Today, the litigation process frequently exposes records of
electronic communications that, in retrospect, may be embarrassing. The Court considers the
contents of this email, which do not disclose anything having competitive sensitivity, relevant to this
Decision. The Court disagrees with the argument that this statement presents any particularly
unusual reputational issues. It is a statement of opinion relevant to the issues before the Court, and
it therefore appears without redaction.
22 Notably, after receiving the comments from Drs. Alt and Rajewsky, Dr. Murphy did in fact add the
Zou (1994) citation to the paper on which he had requested comments. Dr. Murphy also then
submitted his paper regarding the VelocImmune mouse to journals for peer review – and was
rejected on the basis that it “lack[ed] sufficient conceptual novelty to be of general interest to the
broad readership of [Nature Biotechnology] given that it describes an application of a previously
published technology.” (DX 222 at 10034040.)
21
37
Following receipt of the January 2013 presentation from Dr. Smeland, the
PTO issued an Advisory Action maintaining the rejection of claims 1-19 as
anticipated by Lonberg, and claim 20 remained rejected in view of Lonberg and
other references. (Id. at 241, 248.) Shortly thereafter, on February 19, 2013,
Regeneron retained Brendan Jones, Ph.D., to assist with prosecution. (Id. at 268.)
Drs. Jones and Smeland together planned an in-person meeting with the PTO at
which Regeneron relied on the previously provided slide deck described above. That
meeting occurred on March 11, 2013. (Id. at 290.)
Following that meeting, the Examiner prepared the following notes:
“Applicant’s representatives discussed that Lonberg does not teach integration of
human unrearranged immunoglobulin genes into an endogenous site of a mouse
immunoglobulin locus as required by the instant claims.” (Id.) The Examiner
agreed to review the pending application. (Id. at 301.)
On April 26, 2013, the PTO issued a Notice of Allowance for the ‘176
Application. (Id. at 285.) In the statement of reasons for allowance, the Examiner
stated that “[t]he prior art does not teach or suggest a genetically modified mouse
comprising, in its germline cells, human unrearranged variable region gene
segments inserted at an endogenous mouse immunoglobulin locus.” (Id. at 283;
ECF No. 241 ¶ 172.) The applicant transmitted the fee on June 28, 2013 and the
patent issued as the ‘018 Patent on August 6, 2013. (DX 2 at 328-29, 339; ‘018
Patent.)
IV.
LEGAL STANDARDS FOR A FINDING OF INEQUITABLE CONDUCT
38
Merus asserts that Drs. Smeland and Murphy violated their duty of candor
and engaged in inequitable conduct. Merus also alleges that Drs. Smeland and
Murphy engaged in egregious affirmative misconduct by, inter alia, making false
and misleading statements and including false and misleading results in the
January 2013 presentation. Regeneron does not contest that both of these
individuals had a duty of candor to the PTO, but vigorously contests whether that
duty was violated, whether any non-disclosure rose to the level of inequitable
conduct as defined by Therasense, and whether either Drs. Smeland or Murphy
engaged in egregious misconduct.
Each individual associated with the prosecution of a patent has a duty of
candor and good faith to the PTO. 37 C.F.R. § 1.56(a). This duty includes a “duty
to disclose to the Office all information known to that individual to be material to
patentability…” Id. The doctrine of inequitable conduct – which can render a
patent unenforceable – has origins in those duties as well as a lengthy body of
caselaw. In 2011, the Federal Circuit made it clear, however, that the statutory
duties of candor and disclosure and the caselaw doctrine of “inequitable conduct”
are not always coextensive. See Therasense, Inc. v. Becton, Dickinson & Co., 649
F.3d 1276, 1291-1292 (Fed. Cir. 2011) (en banc).
“As an equitable doctrine, inequitable conduct hinges on basic fairness.” Id. at
1292. “[A]s a general rule, this doctrine should only be applied in instances where
the patentee’s misconduct resulted in the unfair benefit of receiving an
unwarranted claim.” Id. (citing Star Sci., Inc. v. R.J. Reynolds Tobacco Co., 537 F.3d
39
1357, 1366 (Fed Cir. 2008)). The Federal Circuit’s en banc decision in Therasense
sets forth the governing legal standard. After noting that asserting claims of
inequitable conduct had “become a significant litigation strategy” that can “cast a
dark cloud over a patent’s validity and paint the patentee as a bad actor” and
increase the costs and complexity of infringement litigation, id. at 1288, the Court
proceeded to “tighten[] the standards for finding both intent and materiality in
order to redirect a doctrine that has been overused to the detriment of the public.”
Id. at 1290.
A court’s determination of inequitable conduct proceeds in two parts: the
accused infringer, who bears the burden of proof on this claim, must prove both that
a nondisclosed reference was material and that the patent applicant acted with the
requisite intent. See id.
“[A]s a general matter, the materiality required to establish inequitable
conduct is but-for materiality.23 When an applicant fails to disclose prior art to the
PTO, that prior art is but-for material if the PTO would not have allowed a claim
had it been aware of the undisclosed prior art.” Id. at 1291. The Court is therefore
The Federal Circuit has explicitly stated that the required level of materiality is not that found in
PTO Rule 56. Rule 56 provides that information is material if it is not cumulative and “(1) It
establishes, by itself or in combination with other information, a prima facie case of unpatentability
of a claim; or (2) It refutes, or is inconsistent with, a position the applicant takes in: (i) Opposing an
argument of unpatentability relied on by the Office, or (ii) Asserting an argument of patentability.”
37 C.F.R. § 1.56(b). Importantly, Rule 56 provides that “[a] prima facie case of unpatentability is
established when information compels a conclusion that a claim is unpatentable…before any
consideration is given to evidence which may be submitted in an attempt to establish a contrary
conclusion of patentability.” Id. The Federal Circuit found this definition to be overly broad. See
Therasense, 649 F.3d at 1294. The Court stated, “Because Rule 56 sets such a low bar for
materiality, adopting this standard would inevitably result in patent prosecutors continuing the
existing practice of disclosing too much of the prior art of marginal relevance and patent litigators
continuing to charge inequitable conduct in nearly every case as a litigation strategy.” Id. at 1295.
23
40
required to place itself in the shoes of a patent examiner and determine whether it
would have allowed the claim “if it had been aware of the undisclosed reference.” Id.
In making its determination as to materiality, “the court should apply the
preponderance of the evidence standard and give claims their broadest reasonable
construction.” Id. at 1291-92 (citing Manual of Patent Examining Procedure
(“MPEP”) §§ 706, 2111 (8th ed. Rev.8, July 2010)).24
Whether prior art is material is determined by one with ordinary skill in the
art. Al-Site Corp. v. VSI Int’l, Inc., 174 F.3d 1308, 1324 (Fed. Cir. 1999). A court
can take into account the inferences and creative steps that a person of ordinary
skill in the art would employ when deciding whether a claimed combination of prior
art would render an invention obvious. DyStar Textilfarben GmbH v. C.H. Patrick
Co., 464 F.3d 1356, 1366-68 (Fed. Cir. 2006).25
A finding by a district court that withheld information, such as a prior art
reference, renders one or more claims invalid (for instance, by rendering it obvious
or anticipated), indicates that the reference is necessarily but-for material. Aventis
Pharma S.A. v. Hospira, Inc., 675 F.3d 1324, 1334 (Fed. Cir. 2012); Am. Calcar, Inc.
v. Am. Honda Motor Co., 651 F.3d 1318, 1334 (Fed Cir. 2011); Therasense, 649 F.3d
In this regard, the Federal Circuit has stated that the patentability of a claim will often “be
congruent with the validity determination – if a claim is properly invalidated in district court based
on the deliberately withheld reference, then that reference is necessarily material because a finding
of invalidity in district court requires clear and convincing evidence, a higher evidentiary burden
than that used in prosecution at the PTO.” Therasense, 649 F.3d at 1292.
25 To determine that a patent is invalid based on obviousness requires proof by clear and convincing
evidence; that is not the standard the Court applies in its determination of but-for materiality –
which is preponderance of the evidence giving the claims their broadest reasonable construction. See
Am. Calcar, Inc. v. Am. Honda Motor Co., 768 F.3d 1185, 1189 (Fed. Cir. 2014); Therasense, 649 F.3d
at 1291-92.
24
41
at 1292 (finding reference was “necessarily material” where the jury and court
found reference anticipated asserted claims).
Of particular importance here is the treatment of prior art in connection with
other related patent applications. Rejections over withheld prior art in other patent
applications with similar claims is evidence of materiality. See Dayco Prods., Inc. v.
Total Containment, Inc., 329 F.3d 1358, 1368 (Fed. Cir. 2003) (“We hold that a
contrary decision by another examiner reviewing a substantially similar claim
meets the Akron Polymer ‘reasonable examiner’ threshold materiality test of ‘any
information that a reasonable examiner would substantially likely consider
important in deciding whether to allow an application to issue as a patent.’… A
prior rejection of a substantially similar claim refutes, or is inconsistent with the
position that those claims are patentable. An adverse decision by another
examiner, therefore, meets the materiality standard under the amended Rule 56.”);
see also, Larson Mfg. Co. of S. Dakota v. Aluminart Prods. Ltd., 559 F.3d 1317, 1339
(Fed Cir. 2009) (“Because the Third and Fourth Office Actions contained another
examiner’s adverse decisions about substantially similar claims, and because the
Third and Fourth Office Actions are not cumulative to the First and Second Office
Actions, the district court correctly found the withheld Office Actions material.”);
McKesson Info. Solutions, Inc. v. Bridge Med., Inc., 487 F.3d 897, 918-925.
A reference is not but-for material if it is merely cumulative. See, e.g.,
Larson, 559 F.3d at 1331; McKesson, 487 F.3d at 913; Dig. Control Inc. v. Charles
Mach. Works, 437 F.3d 1309, 1319 (Fed. Cir. 2006) (“However, a withheld otherwise
42
material prior art reference is not material for purposes of inequitable conduct if it
is merely cumulative to that information considered by the examiner.”); Molins PLC
v. Textron, Inc., 48 F.3d 1172, 1179 (Fed. Cir. 1995); Litton Indus. Prods. Inc. v.
Solid State Sys. Corp., 755 F.2d 158, 167 (Fed. Cir. 1985). A reference is cumulative
when it “teaches no more than what a reasonable examiner would consider to be
taught by the prior art already before the PTO.” Regents of the Univ. of Calif. v. Eli
Lilly & Co., 119 F.3d 1559, 1575 (Fed. Cir. 1997). When a particular reference
discloses a limitation of particular importance not elsewhere disclosed, it is not
cumulative. McKesson, 487 F.3d at 914. Similarly, when a reference contains a
more complete combination of the elements claimed, it is not cumulative even if the
elements are before the examiner in other references. Semiconductor Energy Lab.
Co. v. Samsung Elecs. Co., 204 F.3d 1368, 1374 (Fed. Cir. 2000).
Finally, the mere existence of differences between a withheld reference and
the claims does not, alone, render the reference immaterial. See McKesson, 487
F.3d at 915 (citing Li Second Family Ltd. v. Toshiba Corp., 231 F.3d 1373, 1380
(Fed. Cir. 2000)).
Materiality and intent are separate, independent prongs of the inequitable
conduct inquiry. Therasense, Inc. v. Becton, Dickinson & Co., 649 F.3d 1276, 1290
(Fed. Cir. 2011) (en banc). The requisite specific intent to deceive must be proven
by clear and convincing evidence. Id. “[A] court must weigh the evidence of intent
to deceive independent of its analysis of materiality. Proving that the applicant
knew of a reference, should have known of its materiality, and decided not to
43
submit it to the PTO does not prove specific intent to deceive.” Id. (citing Star Sci.,
Inc. v. R.J. Reynolds Tobacco Co., 537 F.3d 1357, 1366 (Fed. Cir. 2008)). “To prevail
on a claim of inequitable conduct, the accused infringer must prove that the
patentee acted with the specific intent to deceive the PTO.” Id. “In a case involving
nondisclosure of information, clear and convincing evidence must show that the
applicant made a deliberate decision to withhold a known material reference.” Id.
(emphasis in original) (quoting Molins PLC v. Textron, Inc., 48 F.3d 1172, 1181
(Fed. Cir. 1995)). The Court stated further, “[i]n other words, the accused infringer
must prove by clear and convincing evidence that the applicant knew of the
reference, knew that it was material, and made a deliberate decision to withhold it.”
Id.
To meet the clear and convincing evidence standard, “the specific intent to
deceive must be ‘the single most reasonable inference able to be drawn from the
evidence.’” Id. (quoting Star, 537 F.3d at 1366). “Indeed, the evidence ‘must be
sufficient to require a finding of deceitful intent in the light of all circumstances.’”
Id. (emphasis in original) (quoting Kingsdown Med. Consultants, Ltd. v. Hollister,
Inc., 863 F.2d 867, 873 (Fed. Cir. 1988)). Direct evidence of intent is not, however,
required; a court may infer intent from circumstantial evidence. Id. An inference of
intent to deceive is appropriate where the applicant engages in “a pattern of lack of
candor” including where the applicant repeatedly makes factual representations
“contrary to the true information he had in his possession.” Apotex Inc. v. UCB,
Inc., 763 F.3d 1354, 1362 (Fed. Cir. 2014).
44
The only exception to the requirement of a showing of but-for materiality is
where one owing a duty of candor has engaged in affirmative egregious misconduct.
Therasense, 649 F.3d at 1292. “This exception to the general rule requiring but-for
proof incorporates elements of the early unclean hands cases before the Supreme
Court, which dealt with ‘deliberately planned and carefully executed scheme[s]’ to
defraud the PTO and the courts.” Id. (alteration in original) (quoting Hazel-Atlas
Glass Co. v. Hartford-Empire Co., 322 U.S. 238, 245 (1944)). The submission of an
unmistakably false affidavit has been deemed material misconduct. Id. Other
forms of misconduct that have been deemed material include fabricating evidence
submitted to the PTO, executing a deliberately planned scheme to defraud the PTO,
and concealing a rejection over prior art from a related application. See Apotex, 763
F.3d at 1361-62; Intellect Wireless, Inc. v. HTC Corp., 732 F.3d 1339, 1341-46 (Fed.
Cir. 2013). Finding such misconduct material makes sense: “After all, a patentee is
unlikely to go to great lengths to deceive the PTO with a falsehood unless it believes
that the falsehood will affect the issuance of the patent.” Id. (citing Hazel-Atlas,
322 U.S. at 247).
V.
TIMELINE OF THE DUTIES OF CANDOR AND DISCLOSURE
Regeneron’s duties of candor and disclosure spanned the period from
February 16, 2001 to partial issuance on August 6, 2013. Dr. Murphy signed the
Inventor Declaration when the ‘176 Application was filed in February 2001. (DX 2
at 50-51; ECF Nos. 225, 241 ¶ 71.) He “acknowledged [his] duty to disclose
information of which I am aware that is material to the examination of this
45
application…” (DX 2 at 50; ECF Nos. 225, 241 ¶ 72.) Dr. Smeland worked with
others to prepare and prosecute the ‘176 Application. (ECF Nos. 225, 241, ¶ 74; PX
840, Smeland Dep. Tr. at 67:21-24; 70:12-14.) Dr. Smeland has also been involved
in litigation efforts against Merus – including the instant litigation – since 2011; he
oversaw outside counsel on patent prosecution and litigation. (DX 335, Smeland
Dep. Tr. 72:19-25, 81:15-24, 134:4-135:17; DX 184 Entry Nos. 738-40, 745-47, 1327.)
Prior art was raised during the European Opposition and before issuance of
the ‘018 Patent. The Notice of Allowance for the ‘018 Patent was issued on April 26,
2013; a European Opposition setting forth various undisclosed references was filed
on June 12, 2013, and the ‘018 Patent issued on August 6, 2013.
VI.
BROADEST REASONABLE CONSTRUCTION
Based upon the applicable legal standards, the first step in the Court’s
inquiry is whether Regeneron failed to disclose but-for material information to the
PTO. But-for materiality requires that the Court place itself in the shoes of a
patent examiner and determine whether, had the reference(s) been before the
examiner at the time, the claims of the patent would have issued. Therasense, 649
F.3d at 1291-92.
In order to determine whether a reference is but-for material, a court
proceeds in two steps: first, the Court must determine the broadest reasonable
construction (“BRC”) for the claim(s), using principles applicable to claim
construction, and second, based on that construction, the Court must determine
whether a reasonable patent examiner (who is, by definition, one skilled in the art)
46
would have allowed the claim(s) had he or she known of the undisclosed
information. Am. Calcar, Inc. v. Am. Honda Motor Co., 768 F.3d 1185, 1189 (Fed.
Cir. 2014). The BRC is determined based on the claim language itself “in light of
the specification as it would be interpreted by one of ordinary skill in the art.”
Phillips v. AWH Corp., 415 F.3d 1303, 1316 (Fed. Cir. 2005) (en banc) (quoting In re
Am. Acad. of Sci. Tech. Ctr., 367 F.3d 1359, 1364 (Fed. Cir. 2004)). The “broadest
reasonable construction” for a claim or term may well be different from that which
the court may have previously determined during claim construction, but it cannot
be narrower. Facebook, Inc. v. Pragmatus AV, LLC, 582 F. App’x 864, 869 (Fed.
Cir. 2014).
There are 20 claims in the ‘018 Patent – of which claims 1, 11 and 20 are the
only independent claims.
Claim 1 of the ‘018 Patent provides:
A genetically modified mouse, comprising in its germline human
unrearranged variable region gene segments inserted at an
endogenous mouse immunoglobulin locus. (‘018 Patent, 29:24-26.)
Claim 11 provides:
A genetically modified mouse, comprising in its germline human
unrearranged variable region gene segments linked to a mouse
constant region gene, wherein the mouse lacks a human constant
region gene, and wherein the mouse constant region gene is at an
endogenous mouse immunoglobulin locus. (Id., 29:53-59.)
Claim 20 provides:
A mouse, comprising a modification in the germline of the mouse,
wherein the modification comprises:
a. a hybrid heavy chain locus comprising an insertion of human
immunoglobulin heavy chain V, D, and J gene segments, wherein
47
the human heavy chain immunoglobulin V, D, and J gene segments
are linked to a mouse immunoglobulin heavy chain gene, wherein
the mouse immunoglobulin heavy chain gene is at an endogenous
mouse immunoglobulin locus;
b. a hybrid light chain locus comprising an insertion of human
immunoglobulin light chain V and J gene segments, wherein the
human V and J gene segments are linked to a mouse
immunoglobulin light chain constant region gene sequence;
wherein (a) rearranges to form a hybrid heavy chain sequence
comprising a human variable region linked to a mouse constant region,
and (b) rearranges to form a hybrid light chain sequence comprising a
human variable region linked to a mouse constant region, and wherein
the mouse is incapable of forming an antibody that comprises a human
variable region and a human constant region. (Id., 30:39-64.)
To determine the BRC of claim 1, which is sufficient for this proceeding,26 the
Court applies the principles of claim construction set forth in a vast number of
decisions of the Federal Circuit. The Court’s goal is to determine the broadest
reasonable construction that the claim would have meant “to a person of ordinary
skill in the art in question at the time of the invention, i.e., as of the effective filing
date of the patent application.” Phillips, 415 F.3d at 1313. The claims of a patent
do not stand alone; “[r]ather, they are part of ‘a fully integrated written
instrument.’” Id. at 1315 (quoting Markman v. Westview Instruments, Inc., 52 F.3d
967, 978 (Fed. Cir. 1995)). To interpret the meaning – including scope – of a
patent’s claims, a court may use intrinsic and, if necessary, extrinsic evidence. See
Nazomi Commc’ns, Inc. v. Arm Holdings, PLC, 403 F.3d 1364, 1368 (Fed. Cir. 2005)
(instructing courts to look to intrinsic evidence first). Intrinsic evidence includes
the claims, the specification, as well as a patent’s prosecution history. See All
The Court uses, as Merus did in its submissions in this proceeding, claim 1 as exemplary. Merus’s
allegations of unpatentability in view of the Withheld References extend to claims 2-5 as well.
26
48
Dental Prodx, LLC v. Advantage Dental Prods., Inc., 309 F.3d 774, 780 (Fed. Cir.
2002) (“Foremost among the tools of claim construction is of course the claim
language itself, but other portions of the intrinsic evidence are clearly relevant,
including the patent specification and prosecution history.”); see also Phillips, 415
F.3d at 1312 (“It is a ‘bedrock principle’ of patent law that ‘the claims of a patent
define the invention to which the patentee is entitled the right to exclude.’” (quoting
Innova/Pure Water, Inc. v. Safari Water Filtration Sys., Inc., 381 F.3d 1111, 1115
(Fed. Cir. 2004))).
A basic principle of claim construction is that the claims must be read in light
of the specification. See id. at 1315. “[T]he purpose of the specification is to teach
and enable those of skill in the art to make and use the invention and to provide a
best mode for doing so.” Id. at 1323. One skilled in the art is “deemed to read the
claim term not only in the context of the particular claim in which the disputed
term appears, but in the context of the entire patent, including the specification.”
Id. at 1313. The specification is always “highly relevant” to claim construction
analysis; it is the “single best guide to the meaning of a disputed term.” Id. at 1315
(quoting Vitronics Corp. v. Conceptronic, Inc., 90 F.3d 1576, 1582 (Fed. Cir. 1996));
see also On Demand Mach. Corp. v. Ingram Indus., Inc., 442 F.3d 1331, 1338, 1340
(Fed. Cir. 2006) (“[T]he scope and outer boundary of claims is set by the patentee’s
description of his invention,” and “the claims cannot be of broader scope than the
invention that is set forth in the specification.”).
49
A.
The Court’s BRC
Applying these principles, the Court finds that the broadest reasonable
construction of claim 1 is as follows:
The BRC of “genetically modified mouse” is a mouse, the genes of which
have been modified, using the particular LTVEC method described throughout the
specification. This interpretation is based on the language of the claim, the
specification, and the Court’s crediting the testimony of Dr. Davis.
The BRC of “human unrearranged variable region gene segments” is
a DNA variable gene segment that is of human origin and that is unrearranged.
Unrearranged means that it is in its germline configuration. This interpretation is
based on the language of the claim, the specification, and the Court’s crediting the
testimony of Dr. Davis.
As used in this element, “variable region” includes the V, D and J segments.
It also includes the variable regions of both the heavy and light chains.
Notably, the construction of this claim term does not preclude the presence of
mouse variable region gene segments, nor does it preclude human constant region
gene segments. The sole requirement imposed by this element – read in light of the
claim language and the specification – is that there be at least some human
unrearranged variable region gene segments, not only those. This is supported by
certain of the preferred embodiments set forth above which include some human
variable region segments and allow for equivalent mouse segments. For instance,
one preferred embodiment is “an embryonic stem cell wherein the mouse heavy
50
chain variable region locus is replaced, in whole or in part, with a human heavy
chain variable gene locus; an embryonic stem cell of claim wherein the mouse kappa
light chain variable region locus is replaced, in whole or in part, with a human
kappa light chain variable region locus; [and] an embryonic stem cell wherein the
mouse lambda light chain variable region locus is replaced, in whole or in part, with
a human lambda light chain variable region locus …” (‘018 Patent, 7:6-14 (emphasis
added).)
Another preferred embodiment includes an antibody comprising human and
non-human constant regions. (Id., 7:19-23.)
Merus argues that the BRC for this element must also include the limitation
of a contiguous stretch of human variable region DNA. The Court finds that the
broadest reasonable construction does not require such a limitation, though it is a
better reading of the requirements set forth in the specification.27 The specification
is concerned with a method of genetic modification involving large targeting vectors
or LTVECs. A LTVEC is defined as a contiguous fragment of DNA that is more
than 20 kb. There is no necessary reason why, for instance, three LTVECS having
20 kb of regions for integration could not be integrated together to form the
insertion cassette.
The BRC of “inserted” is just that, “to put into.” To insert something
means to add it into. Insertion does not include “deletion.”28 It is different from and
not synonymous with “substitution” or “replacement.” The specification
27
28
This is a broader construction than that the Court determined during claim construction.
This too is a broader construction than that the Court determined during claim construction.
51
distinguishes between insertions, deletions, replacement, and substitution,
indicating a distinction between the words. For instance, it states:
“Another embodiment of the invention is a method wherein the genetic
modification to the endogenous gene or chromosomal locus comprises
deletion of a coding sequence, gene segment, or regulatory element;
alteration of a coding sequence, gene segment, or regulatory element;
insertion of a new coding sequence, gene segment, or regulatory
element; creation of a conditional allele; or replacement of a coding
sequence or gene segment from one species with an homologous or
orthologous coding sequence from a different species.” (‘018 Patent,
3:40-48 (emphasis added).)
At another point, it states:
“Another embodiment is a method of replacing, in whole or in part, in a
non-human eukaryotic cell, an endogenous immunoglobulin variable
region gene locus with an homologous or orthologous human gene locus
further comprising the steps: e) obtaining a large cloned genomic
fragment containing a part of the homologous or orthologous human
gene locus that differs from the fragment of (a); f) using bacterial
homologous recombination to genetically modify the cloned genomic
fragment of (e) to create a second LTVEC; g) introducing the second
LTVEC of (f) into the eukaryotic cells identified in step (d) to replace,
in whole or in part, the endogenous immunoglobulin variable gene
locus…” (Id., 5:61-67, 6:1-5 (emphasis added).)
This interpretation is based on the language of the claim, the specification, and the
Court’s crediting the testimony of Dr. Davis.
The BRC of “at” is into or next to – whether the ‘next to’ is upstream or
downstream.29 Thus, insertion “at” the Ig locus means in or within the locus – not
at a specific point narrower than that. In other words, to use the analogy discussed
much earlier in this Opinion, this element of the claim requires that the DNA
29
This is broader than the Court’s claim construction as determined during claim construction.
52
segment be inserted onto the playing field – there is no requirement that it end up
at the 10 yard line, the 30 yard line or the 50 yard line.
This interpretation is based on the language of the claim, the specification,
and the Court’s crediting the testimony of Dr. Davis.
The BRC of “endogenous mouse immunoglobulin locus” is the entire
endogenous mouse Ig locus, whatever its metes and bounds. It includes both the 5’
and 3’. As the Court found during claim construction, and as both experts agreed
during the trial on inequitable conduct, the size, sequence and borders of the locus
had not been defined at the time the application was filed on February 16, 2001.
(See Trial Tran. 740:16-20.) Thus, if one of skill in the art did not know where the
5’ was located with precision, the targeted insertion anticipated by the ‘018 Patent
might occur in the wrong place. The entire point of the targeted insertion is that it
be into the Ig locus – not proximate to or close by, but within it.
Regeneron’s internal lab notebooks further confirm that the inventors did not
know the length of the locus at the time the application was filed. (ECF No. 105,
Clynes Decl. ¶ 43 (“the boundaries for the endogenous mouse immunoglobulin loci
were not known in 2001, although it was generally known that they were located
somewhere within chromosome 12 (heavy), 6 (kappa) and 16 (lambda)”); ECF No.
210 at 51.)30
Another difficulty with targeting an insertion into the Ig locus is that the size
of the locus can change depending on the strain of mouse. (Davis Tr. Decl. ¶ 252.)
The Court’s decision on claim construction discusses further evidence supporting the
indefiniteness of the 5’ as of February 2001. (ECF No. 210, pp. 51-53.)
30
53
Without knowing the strain of mouse, one would not be able to know the precise
meets and bounds of the locus.
This interpretation is based on the language of the claim, the specification,
and the Court’s crediting the testimony of Dr. Davis.
The Court’s BRC of Claim 1 as a Whole: Taking these elements together,
the Court finds that the broadest reasonable construction of claim 1 allows for the
following:
1.
A genetically modified mouse that is comprised of human
unrearranged variable region gene segments that have been inserted
into its Ig locus;
2.
The human variable region gene segment may be heavy chain or
light chain or both;
3.
The constant region of the above mouse may be human or
mouse;
4.
The mouse variable region may or may not have been deleted;
5.
The transmembrane and cytoplasmic tail of the variable region
may or may not be human; and
6.
The insertion of the unrearranged human variable region gene
segments may or may not be functionally linked to the constant region.
During claim construction, the Court construed the claims as follows:
54
Term
a genetically
modified mouse
human
unrearranged
variable region
gene
segments.
Inserted
at
endogenous mouse
immunoglobulin
locus
B.
Construction
A transgenic mouse produced by the process of using
LTVECs to modify embryonic stem cells and using a
quantitative assay to detect modification of allele in those
cells.
A contiguous stretch of cloned human genomic DNA
containing variable region gene segments (V, D and J for
the heavy chain / V and J for the light chain) in germline
configuration, i.e. as it is in the human genome before the
development of B cells.
One step addition of DNA, without replacing or deleting any
native DNA as a result of the addition.
Into the locus, as opposed to near the locus, by the locus or
around the locus
Indefinite as to the metes and bounds of the locus and
scope.
Regeneron’s BRC
At trial, Regeneron’s technical expert, Marjorie A. Oettinger, Ph.D.,
construed the claims of the ‘018 Patent differently and much more narrowly.
At the outset of this discussion, it is worth noting that throughout this
litigation Regeneron has taken vastly different positions on its own construction of
its claims. Dr. Oettinger’s proposed broadest reasonable construction is far, far
narrower than that which Regeneron itself advocated during claim construction. At
that time – in July 2014 – Regeneron took the position that claim 1 was a single
element and needed no construction – it was plain on its face. That position
compares to the following proposed construction, set forth in Exhibit B to Dr.
Oettinger’s Trial Affidavit – now posited as the broadest reasonable construction:
Dr. Oettinger construed the element genetically modified mouse to
mean: “The claimed mouse has a germline genome comprising, at its
55
endogenous immunoglobulin locus, human unrearranged heavy and/or
light chain variable region gene segments inserted at an endogenous
mouse constant region such that the human variable region genes are
functionally linked, i.e. the resultant mouse is capable of producing an
antibody comprising a human variable region and a mouse constant
region.” (Oettinger Tr. Aff, Exh. B at 1.)
Dr. Oettinger construed only the term “unrearranged” in the element
“human unrearranged variable region gene segments;” she
construed that term to mean “not rearranged but capable of rearranging.”
(Id. at 3-4.)
Dr. Oettinger construed the element “inserted at an endogenous
mouse immunoglobulin locus” to mean: “[m]odified in its germline to
insert human unrearranged variable region gene segments at the
endogenous mouse immunoglobulin locus functionally linked to mouse
constant region gene segments, such that the resultant mouse is capable
of producing antibodies comprising a human variable region and a mouse
constant region.” (Id. at 6.)
Dr. Oettinger construes claim 2 as she does claim 1, “wherein the human
unrearranged variable region gene segments are heavy chain gene
segments, and the mouse immunoglobulin locus is a heavy chain locus.”
(Id. at 9.)
56
Dr. Oettinger also construes claim 3 as she does claim 1, “wherein the
human unrearranged variable region gene segments are light chain gene
segments, and the mouse immunoglobulin locus is a light chain locus.”
(Id.)
Dr. Oettinger construes claim 4 as she does claim 3, “wherein the light
chain gene segments are human kappa light chain gene segments.” (Id. at
10.)
Dr. Oettinger construes claim 5 as she does claim 1, “wherein the
unrearranged variable region gene segments are contained on a genomic
DNA fragment larger than 20 kb.” (Id.)
In sum, Dr. Oettinger construes claim 1 as providing for a genetically
engineered mouse, modified in its germline by insertion of human heavy and/or
light chain unrearranged variable region gene segments at the endogenous mouse
immunoglobulin locus in a manner so as to functionally link those segments with
the mouse constant region which is retained in its entirety, and in which the
homologous mouse variable region is deleted and no longer present. (See, e.g.,
Oettinger Tr. Aff. ¶ 111.)31 Implicit in her construction is a multi-step process: she
In this regard the following chronology is notable: in her first report, Dr. Oettinger construed the
phrase “genetically modified mouse” of claim 1 to require, inter alia, “human heavy and light chain
variable region gene loci inserted at an endogenous mouse constant region.” (See Trial Tr. 664:7-11
(emphasis added).) When she was deposed on those opinions, she dropped the word “and” – revising
the construction to “human variable region gene loci inserted at an endogenous mouse constant
region.” (Trial Tr. 662:3-13, 665:1-17; 668:6-18.) At trial, she modified her construction yet again to
“heavy and/or light chain regions.” (Oettinger Tr. Aff. ¶¶ 68, 111, Exh. B; Trial Tr. 681:1-682:8
(emphasis added).) At trial she also changed from requiring operable or functional linkage as part of
claim 1 to requiring what she referred to as “proper” insertion of human unrearranged DNA at the
mouse Ig locus, i.e. “upstream of the constant region” so as not to “delete the mu enhancer sequence.”
(Trial Tr. 686:19-688:18, 734:21-735:20.) Thus, rather than requiring insertion “at” the endogenous
31
57
conceded at trial that insertion of variable region heavy chain and variable region
light chain gene segments cannot occur simultaneously. (Trial Tr. 665:20-666:4,
675:1-10.) Achieving a fully human variable region therefore requires at least two
insertion steps (one for the heavy chain and one for the light chain) and either a
deletion step or a breeding step (to breed a mouse with a heavy chain insertion with
one with a light chain insertion – however, this would result in rearrangement, thus
running afoul of the “unrearranged” limitation). (Trial Tr. 665:18-667:7.) Dr.
Oettinger also testified that in addition, to achieve an entirely human variable
region would also require a deletion step, in order to remove the mouse variable
region segments. (Trial Tr. 690:13-18.)
Dr. Oettinger urged that her construction was supported by concepts she
believed were implicit and would be readily apparent to one skilled in the art. In
particular, as she understood the goal of the patent to be the creation of
therapeutically useful antibodies, achievement of that goal could only occur if, for
instance, her imposed limitations were included. A hybrid (human/mouse) variable
region would not express therapeutically useful antibodies, and she therefore
assumes that the patent avoids the pitfall by requiring insertion of both heavy and
light chain variable regions as well as deletion of the murine. She also understands
the ‘018 Patent to require placement of the inserted variable regions at just the
right place on the playing field – so that they are “functionally linked” to the
constant region. Again, without such linkage the resulting antibodies (if any) might
mouse constant region, she altered her construction to require insertion “upstream” of the mouse
constant region. (Oettinger Tr. Aff. ¶ 111; Trial Tr. 735:21-736:8, 743:14-744:21.)
58
well not be therapeutically useful. Dr. Davis disagreed with Dr. Oettinger’s implied
limitations. The Court finds that his position is supported by substantial evidence
and more consistent with that of one skilled in the art as of February 2001. Dr.
Oettinger’s reading of the Patent is an attempt to reconcile a goal with the claims; if
the claims do not achieve the goal, however, it is the claims which are deficient.
One cannot simply read into the claims all that may be necessary and desirable to
achieve the goal.
Another implicit limitation Dr. Oettinger imposes is on the constant region.
She opines that because claim 1 mentions only modifications of the mouse variable
region, not the mouse constant region, the mouse constant region must be retained
in its entirety. According to Dr. Oettinger “there is no mention of inserting human
constant region genes or of modifying the mouse constant region in any way” in the
specifications. (Oettinger Tr. Aff. ¶ 112.) She is incorrect, as demonstrated by the
preferred embodiments which the Court has set out in detail above. Finally, she
supports her construction with reference to the presentation Dr. Smeland provided
to the PTO that states that the anticipated modification “swap[s] in only human
variable regions” and “replace[s] mouse variable region with human in situ, while
leaving the normal mouse constant regions intact.” (Id. ¶ 114 (alterations in
original, emphasis added).) But here again, both Dr. Oettinger and Dr. Smeland err
by trying to address an obvious deficiency in claim language by advocacy.
In her trial testimony, Dr. Oettinger references “functional linkage” between
the human variable and mouse constant region segments. (Id. ¶ 119.) She asserts
59
that her use of this phrase does not import a limitation into claim 1; instead, in her
view, she is using that concept to “explain that the human variable region gene
segments are inserted in such a way that the mouse is capable of undergoing all the
necessary steps to eventually transcribe a reverse chimeric antibody gene and
produce a reverse chimeric antibody.” (Id.) She differentiates this from the use of
the word “linked” in claim 8 and the phrase “operably linked” in claim 18 as
references to “rearranged human variable region gene segments, not human
unrearranged variable region gene segments of claim 1.” (Id.) In fact, nothing in
claim 1 requires any linkage; this again is an attempt to salvage a claim which
could otherwise result in a mouse with a useless Ig locus. Moreover, Dr. Oettinger
never persuasively differentiates between being “functionally linked” and “linked”
or “operably linked,” which runs her testimony headlong into the doctrine of claim
differentiation, which dictates that “different words or phrases used in separate
claims are presumed to indicate that the claims have different meanings and scope.”
Anderson Corp. v. Fiber Composites, LLC, 474 F.3d 1361, 1369 (Fed Cir. 2007)
(quoting Karlin Tech. Inc. v. Surgical Dynamics, Inc., 177 F.3d 968, 971-72 (Fed.
Cir. 1999)).
Dr. Oettinger also adds a limitation that the insertion must occur not only in
or at the immunoglobulin locus, but upstream of the mouse constant region. She
again asserts that this must occur in order for the basic goal of the Patent to create
useful human antibodies to occur. In addition, Dr. Oettinger’s construction limits
claim 1 to a single preferred embodiment. This is contrary to basic principles of
60
claim construction. See, e.g., Acumed LLC v. Stryker Corp., 483 F.3d 800, 807 (Fed
Cir. 2007) (“[A]lthough the specification often describes very specific embodiments
of the invention, we have repeatedly warned against confining the claims to those
embodiments.” (quoting Phillips v. AWH Corp., 415 F.3d 1303, 1323 (Fed Cir.
2005))). Dr. Oettinger focuses on Example 3, and particularly LTVEC 1 depicted in
Figure 4B, to the exclusion of the other embodiments. (Oettinger Tr. Aff. ¶ 111-12.)
Dr. Oettinger’s construction of claim 1 also embodies additional limitations
contained in other claims in the Patent, rendering those claims superfluous. This
runs afoul of one of the most basic canons of claim construction that a term should
not be construed to contain a limitation already present in some claims but not
others. See, e.g., Woods v. DeAngelo Marine Exhaust, Inc., 692 F.3d 1272, 1285
(Fed. Cir. 2012); Amgen Inc. v. Hoechst Marion Roussel, Inc., 314 F.3d 1313, 1326
(Fed. Cir. 2003); Wright Med Tech., Inc. v. Osteonics Corp., 122 F.3d 1440, 1445
(Fed. Cir. 1997).
Dr. Oettinger thus imports into claim 1 limitations found only in other
claims: “operably linked” (claim 18), preservation of the mouse constant region
(claim 8), requirement of a reverse chimeric or hybrid locus (claim 20), and
exclusion of a human constant region (claim 10). The Court asked Dr. Oettinger
what she understood to be the difference between claim 1 and claim 11. (Trial Tr.
865:2-867:12, 870:22-871:10, 879:20-880:6.) Dr. Oettinger responded that the “lacks
a human constant region gene” limitation of claim 11 permitted a transgene to be
inserted randomly into the mouse of claim 1, but not claim 11. Put another way,
61
claim 1 can include a human constant region gene and claim 11 cannot. (Id. 865:2866:25.) Dr. Oettinger could not, however, identify any reason why insertion of a
human constant region gene would have any value in the invention. (Id. 867:2871:4.)
Finally, the evidence further established that Dr. Oettinger’s reading of claim
1 includes limitations not found in claim 1 but which are found in draft claims of
related applications. (ECF No. 310 ¶¶ 116-126.)32
The Court did not find Dr. Oettinger’s construction as stated at trial, or in its
two prior iterations, persuasive. The construction as stated at trial is far too
narrow given the claim language and the content of the specifications. None of her
constructions were supported by the substantial and persuasive evidence that Dr.
Davis’s constructions were, and her constructions required the addition of words
and phrases not present in the claim and that in fact eliminate the differentiation
between, inter alia, claim 1 and claim 11.
Dr. Davis’s reasoned and well-supported criticism of these constructions was
manifold.
First, he convincingly supported the position that insertion “at the
endogenous” immunoglobulin locus was not sufficiently defined in 2001 to allow one
After Regeneron disclosed the Withheld References in those applications, the Examiners rejected
those claims. (ECF No. 310 ¶¶ 113-115, 129-130, App. B.) Regeneron then added limitations such as
operably linked/operable linkage to a mouse constant region in an attempt to overcome the rejection
in light of the WR. (Id. ¶ 131, App. B.) This further demonstrates that Regeneron did not view such
a limitation as inherent in claim 1 in the ‘018 Patent or initial drafted claims of related applications.
(Id. ¶ 347.)
32
62
skilled in the art to practice the invention. The metes and bounds of the 5’ of the
locus were unknown. (Davis Tr. Decl. ¶ 100.)
Second, he convincingly argues that the LTVEC method which is central to
the Patent was not enabled in 2001. (Id. ¶ 101.)
The evidence is overwhelming that Dr. Oettinger’s construction is not a
“broad” construction at all – let alone the “broadest reasonable” construction. It is
exceedingly narrow – perhaps the narrowest possible construction. This is a finding
of fact based upon the Court’s review of the record in light of how Dr. Davis opined
one of ordinary skill in the art would understand the claim as of 2001 (this
determination necessarily includes the Court’s factual determination as to what one
skilled in the art would include within various scientific concepts within the claim,
so the Court’s determination is not and could not be one solely of law).
VII.
MATERIALITY OF THE WITHHELD REFERENCES
Using the BRC of the ‘018 Patent, the Court next examines the information
allegedly withheld from the PTO. The Court’s task is to determine whether,
construing the terms pursuant to the BRC, the PTO would have allowed the claims
had such information been before it. Four references known to Regeneron’s Drs.
Smeland and Murphy were not disclosed to the PTO during patent prosecution:
1.
DX 70 – Marianne Brüggemann & Michael S. Neuberger,
“Strategies for Expressing Human Antibody Repertoires in Transgenic
Mice”, 17(8) Review Immunology Today 391 (1996) (“Brüggemann”);
2.
DX 6 – WIPO Patent Publication No. WO 91/00906 entitled
“Chimeric and Transgenic Animals Capable of Producing Human
Antibodies” credited to Clive Wood et al. (“Wood”);
63
3.
DX 78 – Shinsuke Taki et al., “Targeted Insertion of a Variable
Region Gene into the Immunoglobulin Heavy Chain Locus”, 262
Science 1268 (1993) (“Taki”); and
4.
DX 72 – Yong-Rui Zou et al, “Cre–loxP-mediated Gene
Replacement: A Mouse Strain Producing Humanized Antibodies”, 4(12)
Current Biology 1099 (1994) (“Zou”).33
These references are referred to collectively as the “Withheld References” or “WR”.
In addition, Merus asserts that during prosecution of the ‘018 Patent, Regeneron
failed to disclose Merus’s Statement of Facts and Arguments (“Merus’s Brief”) or
Kymab’s Statement of Facts and Arguments (“Kymab’s Brief,” together the
“European Opposition Briefs”), in opposition to European Patent No. 1,360,287. (See
DX 380, Regeneron’s First Supplemental Responses to Fifty of Merus’s Requests for
Admission, Nos. 61-64, 83-84.)
The principal question before the Court is whether, individually or
collectively, these references meet the rigorous but-for standard of materiality
required by Therasense.34 They do. The “PTO would not have allowed [this] claim
had it been aware of the undisclosed prior art.” Therasense. Inc. v. Becton,
Dickinson & Co., 659 F.3d 1276, 1291 (Fed Cir. 2011) (en banc). In making this
determination, the Court “appl[ies] the preponderance of the evidence standard and
give[s] claims [in the ‘018 Patent] their broadest reasonable construction.” Id. at
In response to requests for admission, Regeneron admitted that Dr. Smeland did not disclose any
of the four references to the PTO. (RFAs 49-56.)
34 As discussed below, a second principal question is of course intent. Here, due to the discovery
misconduct which the Court has found and which was extraordinary by any standards, the Court
imposes the sanction of an adverse inference as to intent.
33
64
1291-92 (citing Manual of Patent Examining Procedure (“MPEP”) §§ 706, 2111 (8th
ed. Rev.8, July 8, 2010)).
Importantly, and supportive of this Court’s determination, each of the
Withheld References has formed a part of the basis for either outright rejection or
other action by the PTO in connection with other applications in the same family of
patents.
The Court discusses its determinations with regard to each of the Withheld
References below.
A. Brüggemann
The parties have focused particular attention on one section in the
Brüggemann reference: “Replacing mouse Ig genes with human genes.” (DX 70 at
394.) That section states:
The approaches described above involve the random integration of
exogenous mouse human transloci into the mouse genome; these
transgenic animals are then crossed with mice carrying disruptions of
their own endogenous Ig loci. An attractive alternative would be to
replace the mouse Ig loci with the human Ig loci; in this way it might
also be possible to retain and exploit any possible regulatory sequences
in the mouse loci that are located distal to protein-coding regions.
While such ambitions have not been realized, successful replacement of
small portions of the mouse genome have been described…[citing, inter
alia, Zou]…Furthermore, technologies for directed gene replacement
(e.g. using the Cre–loxP system) might allow the generation of animals
in which much of the DNA of the mouse Ig loci is substituted by human
Ig-gene DNA. (Id. at 394-95 (emphasis added).)
Notably, Brüggemann cites to Zou (another Withheld Reference) to
accomplish partial replacement of the mouse Ig locus with human Ig DNA.
65
Dr. Davis testified credibly that, more particularly, Brüggemann teaches
integrating human unrearranged variable region gene segments into the Ig locus.
(Davis Tr. Decl. ¶¶ 81, 115.) He also persuasively opines that this reference also
discloses that “directed gene replacement” allows much of the DNA of the mouse Ig
loci to be substituted by human DNA. (Id. ¶ 81.) In addition, use of the phrase
“much of” would have been reasonably understood by one of skill in the art to refer
to a replacement in whole or in part, which is similar to the “in whole or in part”
references in the ‘018 Patent; and also allows for insertion of an entirely human
gene segment and retaining an entirely mouse gene segment, just as in the ‘018
Patent. (Id. ¶ 82.)
Finally, the evidence clearly establishes that Brüggemann discloses the
desirability of inserting human gene segments into the mouse Ig locus.
Brüggemann provides the explicit motivation of having the ability to exploit
regulatory sequences “distal to protein-coding regions.” (DX 70 at 394; Davis Tr.
Decl. ¶ 81.)
The Court finds that Brüggemann is but-for material and that the PTO
would not have allowed claims 1-5 of the ‘018 Patent had Brüggemann been before
the Examiner.
B. Wood
The parties have focused particularly on “Example 2” from the Wood
reference. That example states:
66
Construction of an Unrearranged Human Ig Gene in a Cosmid Vector
Another unrearranged DNA fragment construct according to this
invention comprises an unrearranged human VH gene segment, the
human JH locus, with a single upstream, unrearranged D segment, the
murine μ [mu] gene including its upstream μ [mu] switch region, the
murine gamma 2b switch region, the human gamma 1 coding region.
The murine μ [mu] may be changed for the human μ [mu] region, since
both regions have been found to signal allelic exclusion in the
transgenic mouse models. (DX 6 at 32:10-20.)
Wood discloses insertion of human variable region gene segments upstream
of an endogenous mouse constant region, to produce a genetically modified mouse.
(Id. at 1:4-9, 2:8-25, 6:11-20, 9:7-10; 9:19-10:10, 19:13-18, Davis Tr. Decl. ¶¶ 91-93.)
Wood indicates that a skilled artisan may take advantage of the endogenous mouse
μ (mu) constant region (that is, from the animal itself), or may alternatively produce
a transgene that includes human V, D and J segment(s), that adds an exogenous
mouse µ (mu) constant region. (DX 6; Davis Tr. Decl. ¶¶ 91-93.) A skilled artisan
would understand that Wood teaches a targeted insertion of exogenous human V, D
and J gene segments (or contiguous genomic unrearranged human variable region
gene segments) at the mouse locus to be used in conjunction with the endogenous
mouse constant region. (DX 6; Davis Tr. Decl. ¶¶ 91-94.) Wood also motivates a
person of ordinary skill in the art to use an endogenous mouse constant µ (mu)
region for purposes of allelic exclusion. (DX 6; Davis Tr. Decl. ¶ 93.) One skilled in
the art would understand Wood to be disclosing the possibility of a reverse chimeric
mouse, or a mouse with a reverse chimeric locus. (In this regard, he also cites K.R.
Thomas et al, for techniques for obtaining chimeric and transgenic animals.) (DX 6
at 20:4-6; Davis Tr. Decl. ¶ 95.)
67
Dr. Oettinger argues that because the insertion disclosed in Wood is not
targeted at the Ig locus, not all of the benefits provided by the ‘018 Patent are
present. (Trial Tr. 856:21-858:5) It is certainly true that Wood does not target
insertion at the Ig locus, but nor does he exclude insertion at the locus. Thus, Wood
is appropriately understood as including but not limiting insertion at the Ig locus.
To the extent that insertion occurs outside the locus, it is possible – though there is
no actual evidence in the record apart from Oettinger’s ipse dixit – that all the
benefits that could result from the ‘018 Patent might not be available. This,
however, overlooks the fact that the ‘018 Patent allows for targeted insertion
without deletion of the homologous mouse gene segment, potentially also decreasing
or even eliminating the hoped-for benefits, and if the insertion occurs in a location
not functionally linked to the mouse constant regions, there could also be a
diminution or elimination of benefits. Thus, there is no evidence from which the
Court can draw a conclusion that fewer benefits are necessarily available from
Wood than from the ‘018 Patent.
The Court finds that Wood is but-for material and that the PTO would not
have allowed claims 1-5 of the ‘018 Patent if Wood had been before the Examiner.
C.
Taki
The Taki reference describes the targeted insertion of rearranged mouse
variable region into the Ig locus. (DX 78, at 1266.) The parties have appropriately
focused on the entirety of the article. The key point of disagreement between the
parties’ technical experts is whether targeted insertion of rearranged mouse
68
variable region gene segments is sufficiently different from targeted insertion of
unrearranged human variable region gene segments to render this reference
immaterial. As a matter of law, the mere existence of differences between a
withheld reference and the claims does not, alone, render the reference immaterial.
See McKesson Info. Solutions, Inc. v. Bridge Med., Inc., 487 F.3d 897, 915 (Fed Cir.
2007) (citing Li Second Family Ltd. v. Toshiba Corp., 231 F.3d 1373, 1380 (Fed. Cir.
2000)).
Dr. Davis has provided persuasive testimony and support for his position that
the reference is material – and that the difference of “rearranged” versus
“unrearranged” does not undermine that materiality. Taki states, in part:
We designed a targeting vector in order to introduce a rearranged VH
region gene … into a chromosomal position where rearranged VH genes
locate, 5’ to the heavy chain enhancer.… A successful targeting event
would yield an IgH locus carrying the VH T15 gene in the position of JH
… (DX 78 at 1268.)
The evidence before the Court overwhelmingly supports but-for materiality of
Taki. Taki teaches targeting at the specific locus – the Ig locus – with operable
linkage (the VHT15 gene would be in the position of the JH segment and thus
proximate to the mouse constant region), taking advantage of the mouse regulatory
and constant regions. Taki, in short, provides the motivation to target human
variable region DNA into the mouse Ig locus. Taki contrasted the mouse disclosed
by this reference (a second generation mouse) with one made with random
integration – such as that by Lonberg. During prosecution of the ‘018 Patent, Dr.
Smeland similarly argued that the targeted insertions into the Ig locus was a point
69
of difference from Lonberg. As a result, Dr. Smeland’s argument itself further
reinforces the persuasive evidence that Taki is not cumulative of Lonberg. In
addition, Taki articulates several of the benefits that Dr. Smeland told the patent
Examiner had never before been recognized (DX 2 at 163), and which Dr. Smeland
argued were “entirely unexpected” by producing antibodies from an endogenous
mouse Ig locus. (Id. at 211 (arguing that it was unexpected that mice having
exogenous human Ig DNA inserted at the mouse Ig locus “would exhibit essentially
normal B cell development and have essentially normal immune systems…” ); Davis
Tr. Decl. ¶ 57.) Clearly, the fact that Taki discloses those same benefits and results
disputes the novelty Dr. Smeland asserted with regard to the ‘018 Patent.
The Court finds that the Taki reference is but-for material and that the PTO
would not have allowed claims 1-5 of the ‘018 Patent if Taki had been before the
Examiner.
D.
Zou
The Zou reference concerns Cre–loxP35 recombination, a type of
recombination carried out by a bacterial enzyme and not homologous
recombination. The ‘018 Patent refers to use of a loxP technique in Figures 4C and
4D as well. The parties have focused on the entirety of the reference. The article
begins:
The bacteriophage-derived Cre–loxP recombination system operates
efficiently in mammalian cells. This system is particularly useful in
gene-targeting experiments in the mouse, and has already been used to
The term “Cre–loxP” refers to a method for the introduction of genetic modifications into specific
genes by homologous recombination using Cre a site-specific, bacteriophage P1-derived recombinase.
The Cre recombinase cuts at the loxP-tagged genes.
35
70
generate ‘clean’ deletions of target genes in the germ line, as well as to
inactivate target genes in a conditional manner.
….
Results: We used the Cre–loxP system, in mouse embryonic stem cells,
to replace the mouse gene Cγ1, which encodes the constant region of
the heavy chain of IgG1 antibodies, with its human counterpart. The
mutation was transmitted through the mouse germ line, and the
resulting mutant mice were crossed with mice expressing κ [kappa]
light chains with a human, instead of a mouse, constant region. Mice
homozygous for both mutations produce humanized κ[kappa]-chainbearing IgG1 antibodies at the same level and efficiency as wild-type
mice produce murine antibodies.
…
Conclusions: Cre–loxP-mediated gene replacement is a simple and
efficient general method of targeted mutagenesis in the mouse. (DX 72
at 1099.)
Later in the article, Zou et al. described their results more fully:
We used Cre–loxP-mediated gene replacement in our attempt to
generate a mouse strain that would produce antibodies with constant
(C) regions of human rather than mouse origin.… In these mutants,
the entire Cγ1 gene is replaced by its human counterpart, except for
the exons encoding the transmembrane and cytoplasmic portions of the
γ1 chain; we hoped in this way to minimize the danger of disturbing
membrane expression and signaling of the humanized IgG1 in the
mouse. (Id. at 1100.)
Zou teaches targeted insertion of human gene segments into an endogenous mouse
Ig locus. The resulting mouse would have human constant region gene segments,
but would retain murine transmembrane and cytoplasmic tail gene segments.
The evidence convincingly demonstrates that to one skilled in the art, Zou
teaches targeted insertion of human Ig DNA into the mouse Ig locus and notes that
doing so produces humanized antibodies at the same level of efficiency as wild-type
71
mice. Thus, it teaches the very same benefits that Regeneron’s Dr. Smeland
represented to the PTO were novel and unexpected. This reference further teaches
the importance of retaining the transmembrane and cytoplasmic tail of the mouse
constant region to achieve normal production of antibodies. This reference provides
significant motivation to target the mouse Ig locus with human Ig DNA.
The Court finds that the Zou reference is but-for material and that the PTO
would not have allowed claims 1-5 of the ‘018 Patent if Zou had been before the
Examiner.
E.
Withheld References as a whole
It is also helpful to place the claim language of the ‘018 Patent directly
alongside the Withheld References.
A genetically modified mouse: this alone was not novel or asserted by
Regeneron to be the basis for the novelty of its invention. (See Davis Tr. Decl. ¶¶
105-06.) Long homology arms were, for instance, previously known in the art. (See,
e.g., DX 77; DX 9, U.S. Patent No. 6,069,010 at Figs. 2A-C, 4:3-16; Davis Tr. Decl. ¶
107.)
Comprising in its germline: Zou teaches germline modifications to the mouse
in the form of modifications of integrated human Ig DNA that were passed down to
subsequent generations. Brüggemann reports Zou’s germline transmissions.
(Davis Tr. Decl. ¶ 111.) Wood taught a chimeric or transgenic non-human
eukaryotic animal having incorporated into its germline unrearranged DNA
fragments bearing exogenous Ig gene segments. (Id. ¶ 112.) Taki taught “a method
72
of generating ‘second generation’ Ig transgenic mice, in which the transgene
behaves like a normal rearranged Ig gene in terms of B cell-specific expression,
class switching, and somatic hypermutation.” (Id. ¶ 113.) Taki also notes
production of a mouse “strain” – suggesting germline modification. (Id.)
Human unrearranged variable region gene segments: Brüggemann teaches
the desirability of inserting a human Ig locus into a mouse Ig locus. (Id. ¶ 115.) Zou
and Taki both teach methods with respect to a contiguous set of human V, D, and J
gene segments (heavy chain) and V and J (light chain). (Id.)36
Inserted at an immunoglobulin locus: Taki, Zou, Brüggemann, and Wood all
provide specific motivation for targeting into the endogenous mouse Ig locus to
produce a genetically modified mouse, and one that is capable of producing
humanized antibodies having normal somatic hypermutation and isotype switching.
(Id. ¶ 125.) Taki taught targeted insertion of a variable region gene into the mouse
Ig heavy chain locus. (Id. ¶ 127.) Moving from this to the light chain locus was not
a substantial step. Moreover, Zou taught replacing a heavy-chain C-region gene
with a human counterpart, and combining this mutation with a similar one in the κ
[kappa]-chain locus, resulting in a mouse strain with κ [kappa]-chain bearing IgG1
antibodies with human instead of mouse constant regions. (Id.) Zou also taught
single step insertion (that is, insertion without deletion) followed by deletion.
In addition, Dr. Davis persuasively opined – with support – that a skilled
artisan could combine the teachings of Wood and Taki and/or Zou to identify the
As discussed below, interpretations by various examiners of related applications (the ‘842 and
‘473) also cited Brüggemann to make a similar point. (See also Davis Tr. Decl. ¶ 120, 122.)
36
73
region within the locus for targeted insertion of human unrearranged variable
region gene segments. (Id. ¶ 133.)
Claim 2: Claim 2 differs from claim 1 insofar as the DNA inserted is human
unrearranged variable heavy chain, targeted to the heavy chain locus. Taki, Zou,
and Brüggemann all teach targeting the endogenous heavy chain locus. Use of
heavy chain variable DNA is described by Taki (for mouse rearranged), in Wood (for
human unrearranged variable region segments), and more generally in
Brüggemann. (Id. ¶ 135.)
Claims 3 and 4: Claim 3 differs from claim 2 in that it is concerned with
unrearranged variable region light chain (inserted into the Ig locus). Taki, Zou,
Brüggemann and/or Wood disclose instructions and motivations for targeting
specific known regions of the light chain locus with homologous human DNA. (Id. ¶
136.) Zou and Wood both specifically disclose modifications of the light chain. (Id.)
Claim 5: Claim 5 requires the unrearranged variable region to be greater
than 20 kb. As discussed below, Yang discusses this, as does Kucherlapati. A
person reading the teachings of Zou, Taki, Brüggemann, and Wood would, in light of
the art at that time, have the information to produce a mouse with the elements of
claim 5. (Id. ¶ 138.)
Beyond this, Dr. Davis persuasively opines – with support – that even using
Dr. Oettinger’s flawed claim constructions, the Withheld References are nonetheless
but-for material. (Id. ¶¶ 145-64.) The Court agrees with Dr. Davis’s views in this
regard.
74
Regeneron’s repeated explanation as to why the Withheld References are not
but-for material is that the ’018 Patent discloses a reverse chimeric mouse, one that
features human variable and mouse constant regions in the mouse Ig locus. This
argument ignores the essential point that claim 1 allows for a partially
human/partially mouse variable; the same is true for the constant region. Thus,
focusing on the novelty of entirely human variable is fundamentally inaccurate.
With regard to Brüggemann, Regeneron specifically argues that this
reference concerns replacing an entire mouse Ig loci with an entire human while the
’018 Patent teaches retaining an entirely mouse constant. In fact, as described
elsewhere herein, the ‘018 Patent also allows for a human or mouse constant. As
for Zou, Regeneron primarily reiterates the cumulativeness arguments this Court
rejects below.
F.
The European Opposition Briefs
Davis testified credibly that a skilled artisan reading the European
Opposition Briefs would recognize the key teachings of the Withheld References and
how they applied to the ‘018 Patent . (Id. ¶¶ 238-54.) The European Opposition
briefs discuss each of the Withheld References in detail. The evidence at trial
persuasively supports them. A skilled artisan would have understood that, as a
result, the Withheld References were (if accurately described in the briefs) material.
(Id. ¶ 254.) A skilled artisan reading both the Opposition Briefs and then the
references themselves would have been able to confirm the faithful and accurate
description of the references in those briefs and would have thus been led
75
inexorably to an understanding of their relevance and but-for materiality. (Id.)
Kucherlapati and the European Opposition Briefs, read together – again, with
confirmation of a faithful description of the references – would have prevented
issuance of claims 1-5 of the ‘018 Patent. (Id.)
The Court finds that if the European Opposition Briefs had been read
together with the references that were already before the Examiner, the Examiner
would have understood the relevance and but-for materiality of the four WR
discussed in detail above. The Court finds that one skilled in the art would
therefore understand that the Opposition Briefs are but-for material and that the
PTO would not have allowed claims 1-5 of the ‘018 Patent they had been before the
Examiner.
VII.
CUMULATIVENESS OF THE WITHHELD REFERENCES
Regeneron argues that even if the Withheld References and the European
Opposition Briefs are material in some sense (a point it vigorously contests), they
are in all events cumulative of references that were disclosed to the PTO,
particularly Kucherlapati,37 Lonberg, and Jakobovits. (See ‘018 Patent, References
Cited.) The parties introduced extensive evidence at trial as to whether these three
references render the Withheld References and the European Opposition Briefs
cumulative. Based on the persuasive and well supported testimony of Dr. Davis,
References to “Kucherlapati” refer to U.S. Patent No. 6,114,598, issued to Raju Kucherlapati et al.
on June 5, 1995. (See DX 5.)
37
76
and the Court’s assessment of the less persuasive and shifting explanations by Dr.
Oettinger, the Court finds that they do not. (Davis Tr. Decl. ¶¶ 201-37.)
Far from cumulative, each of the Withheld References provides specific
teachings, disclosure and motivation for performing targeted insertion of exogenous
DNA into the Ig locus that are not contained in what the Examiner already had
before it (including, inter alia, Kucherlapati, Lonberg, and Jakobovits.) (Davis Tr.
Decl. ¶¶ 201-206.) One skilled in the art and who had knowledge of each of the
Withheld References as well as Kucherlapati, Lonberg and Jakobovits, would
understand that the genetically modified mouse disclosed in claim 1 of the ‘018
Patent was disclosed by the Withheld References but not in the prior art that was
shared with the Examiner. (Davis Tr. Decl. ¶ 203-04.) Indeed, at several points in
patent prosecution Regeneron itself focused on the shortcomings of the disclosed
prior art to argue in favor of the instant application, and thereby highlighted the
fact that certain aspects disclosed in the Withheld References did not appear in the
prior art shared with the Examiner and thus that the references were not all
cumulative of one another. The Court finds that an Examiner with such knowledge
would not have allowed claims of the ‘018 Patent.
A.
Kucherlapati
The evidence demonstrates that Regeneron argued in European Opposition
proceedings that Kucherlapati was not enabled. (Davis Tr. Decl. ¶¶ 201-17, 220.)
As a matter of law, a reference to a non-enabled device cannot render a reference to
an enabled device cumulative. Cf. In re Antor Media Corp., 689 F.3d 1282, 1287
77
(Fed. Cir. 2012) (“A prior art reference cannot anticipate a claimed invention ‘if the
allegedly anticipatory disclosures cited as prior art are not enabled.’” (quoting
Amgen Inc. v. Hoechst Marion Roussel, Inc., 314 F.3d 1313, 1354 (Fed. Cir. 2003))).
But in addition, the evidence demonstrates that Kucherlapati does not
contain the same teachings and motivations disclosed in Taki. (Davis Tr. Decl. 22735.) Taki is more specific in terms of targeting. As discussed above, Taki discloses
targeting exogenous variable region DNA at a specific position upstream of the 5’
heavy chain enhancer and mouse constant region. This specific integration allows
for the exogenous Ig DNA to express and experience good somatic hypermutation,
isotype switching and B cell development. In contrast, Kucherlapati discloses only
vague targeting.
Taki also provides different motivations than Kucherlapati: Taki includes
the motivation to target the endogenous mouse Ig heavy chain locus with functional
exogenous variable region DNA to allow the exogenous Ig variable region DNA to
“participate in isotype switching and undergo somatic hypermutations.” (Id. ¶ 227.)
Kucherlapati does not. (Id. ¶ 228.) Taki reports that “present data establish a
method of generating ‘second generation’ Ig transgenic mice, in which the transgene
behaves like a normal rearranged Ig gene in terms of B cell-specific expression,
class switching, and somatic hypermutation.” (Id. ¶¶ 229, 233; DX 78 at 1270.) No
reference before the PTO disclosed this.
Nor is Kucherlapati cumulative of Zou. (Davis Tr. Decl. ¶ 220.) Zou discloses
a genetically modified mouse having human Ig DNA inserted into the mouse heavy
78
chain locus, and breeding that with a genetically modified mouse having human Ig
DNA inserted into the mouse kappa chain locus. (Id. ¶ 221.) This is not disclosed in
any of the references before PTO, including Kucherlapati. In addition, Zou
discloses the importance and benefits of maintaining the endogenous mouse
transmembrane and the cytoplasmic tail, “to minimize the danger of disturbing
membrane expression and signaling of the humanized IgG1 in the mouse.” (DX 72
at 1100; see also Davis Tr. Decl. ¶ 71.) This, in turn, leads to the substantial benefit
of a mouse which produces antibodies at the same level and efficiency as wild-type
mice. These disclosures of technique, benefit and motivation were not disclosed in
Kucherlapati.
Kucherlapati is also not cumulative of Wood. (Davis Tr. Decl. ¶ 237.) Wood
instructs the use of the endogenous mouse µ (mu) region – Kucherlapati does not.
Indeed, Kucherlapati deletes and replaces the endogenous mouse µ (mu) region. In
addition, Kucherlapati’s motivation for targeting the mouse Ig locus is for
transformation efficiency, not to utilize the endogenous mouse µ (mu) constant
region. (Id.)
Finally, Kucherlapati is also not cumulative of the Brüggemann reference.
Brüggemann teaches the benefits of targeted insertion as taking advantage of the
regulatory regions distal to the protein-coding regions and the expectation that
mouse regulatory sequences distal to the protein coding regions will remain intact.
(Id. ¶ 208.) In contrast, Kucherlapati states that “the xenogeneic locus will be
placed substantially in the same region as the analogous host locus, so that any
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regulation associated with the position of the locus will be substantially the same
for the xenogeneic immunoglobulin locus.” (DX 5, 10:51-55.)
B.
Lonberg & Jakobovits
Lonberg similarly does not render Brüggemann cumulative. Lonberg did not
teach targeted insertions of functional DNA into the mouse Ig locus, and simply
used random integration to add functional human Ig DNA. (Davis Tr. Decl. ¶ 218.)
One example of the lack of cumulativeness is evident in a comparison of Lonberg,
Kucherlapati, and Jakobovits (individually or collectively) to Wood. Wood teaches a
DNA construct which includes human V, D and J segments, including human
unrearranged variable region gene segments, and that this construct may be used
in conjunction with the endogenous mouse mu region, prior to recombination. Wood
also discloses use of the μ (mu) constant region from the mouse itself. (DX 6.) None
of the references before the PTO, including Kucherlapati, Lonberg or Jakobovits
disclose these things.
Additionally, unlike the Withheld References, both Lonberg and Jakobovits
refer to a “knock-out”38 plus transgene mouse made via random insertion. None of
the Withheld References require knock-out, and each discusses targeted – not
random – insertion. Moreover, the Jakobovits ‘364 Patent only targets the mouse Ig
locus to insert lox sites, not exogenous functional Ig DNA. The insertion of lox sites
is the first step in that patent’s goal of modifying hybridomas, not insertion of
immunoglobulin gene segments into a transgenic mouse. (Davis Tr. Decl. ¶ 221
The ‘018 Patent defines “gene knockout” as genetic modification resulting from disruption of the
genetic information encoded in a locus. (‘018 Patent, 9:16-18.)
38
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n.189.) In sum, unlike the Withheld References, Jakobovits provides no motivation
to target the mouse Ig locus with exogenous DNA. Finally, Lonberg does not teach
insertion of human Ig DNA into an endogenous mouse Ig locus and therefore also
provides different motivation than that evident in the Withheld References. (Davis
Tr. Decl. ¶ 219.)
Based on the evidence of how one skilled in the art would understand the
references before the Examiner compared to the Withheld References, the Court
finds that the Withheld References are not cumulative. This is a finding of fact by
the Court.
VIII. THE BASIS OF OTHER REJECTIONS39
The ‘018 Patent is only one of a large number of related patents or
applications in the same family. In connection with prosecution of related
applications with substantially similar claims, Regeneron’s patent counsel have
filed disclosure forms (“IDS”) specifically referencing the Withheld References. The
prosecution history with regard to these patents and applications is highly relevant
to the issue of the but-for materiality of the Withheld References. As set forth
below, Examiners have found that Taki, Brüggemann, and Wood, three of the
Withheld References at issue here, form a basis for rejection of claims substantially
Regeneron argues that rejections of other applications is not equivalent to proving but-for
materiality. The Court agrees. Nevertheless, the ways the PTO treated the Withheld References
when considering claims substantially similar to those in the ‘018 Patent are, without a doubt,
probative of the Withheld References’ materiality.
39
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similar to claim 1 (as well as others) in the ‘018 Patent. (See, e.g., Davis Tr. Decl.
¶165 et seq.)40
A.
Rejections by the PTO
The list of applications in which claims substantially similar to the claims in
the ‘018 Patent were rejected on the basis of the references Regeneron withheld
during prosecution of the ‘018 Patent is extensive. The Court considers a few
relevant examples.41 Consider first U.S. Patent Application Number 11/809,473.
(DX 17.) Claims 1, 8, and 9 of the ‘473 Application were similar to claims 1 and 5 of
the ‘018 Patent: the two sets of claims each refer to modifying a mouse endogenous
chromosomal locus by using a targeting vector to insert a genomic fragment larger
than 20 kb and then using an MOA assay to detect modification. (Id. at 200.)
However, Brüggemann was disclosed in the prosecution of the ‘473 Application, and
the PTO cited it as a basis to reject the overlapping claims on obviousness grounds.
(Id. at 214.) The basis for this rejection is thus probative of whether the
Brüggemann reference was but-for material.
The Court also considers U.S. Patent Application No. 13/719,842. (DX 16.)
This Regeneron applications contain claims largely similar to claims 1 and 2 of the
‘018 Patent. For example, claim 4 of the ‘842 Application concerns “insertion” of
While Zou has not itself been cited in rejections, Zou is cited and relied upon in the Brüggemann
reference here at issue. “Zou informs the skilled artisan of the particular regions within the mouse
locus that are important for producing humanized antibodies at the same level of efficiency as wildtype mice.” (Davis Tr. Decl. ¶ 187.)
41 The Court finds that all of the examples described advance claims sufficiently similar to those in
the ‘018 Patent to make the Examiners’ treatment of the Withheld References relevant to the
materiality of those references in the prosecution of the ‘018 Patent.
40
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“unrearranged human immunoglobulin sequences” “at” “a non-human
immunoglobulin locus,” while claim 9 concerns performing this method in “a mouse
cell.” (Id. at 39.) This claim compares with claim 1 of the ‘018 Patent, which
concerns “[a] genetically modified mouse, comprising in its germline human
unrearranged variable region gene segments inserted at an endogenous mouse
immunoglobulin locus.” (‘018 Patent, 29:24-26.)
During the application process for the ‘842 Application, Dr. Smeland
produced an IDS that identified the same material submitted in an IDS in
connection with prosecution of the ‘018 Patent; that is to say, that did not contain
the Withheld References. (Id. at 76-80.) Although Brüggemann was not included in
Dr. Smeland’s IDS, it was part of the basis for the PTO’s initial rejection of claims 3,
4, 8, and 9; the examiner stated that “Brüggemann et al. teach that an attractive
alternative of the mice would be to replace the mouse Ig locus with the human Ig
locus; in this way, it might also be possible to retain and exploit any possible
regulatory sequences in the mouse loci that are located distal to the protein-coding
regions.” (Id. at 95-96 (emphasis in original).)
After Regeneron amended the claims in the ‘842 Application and the PTO
maintained its rejection of claims 3, 4, 8, and 9 on the basis of, inter alia,
Brüggemann, a Third Party Submission (“TPS”) disclosed Taki and described its
relevance and materiality to the pending claims. (Id. at 147.) Dr. Smeland then
submitted an additional IDS that contained the Brüggemann, Taki, and Zou
Withheld References. (Id. at 172-74.) Subsequently, the Examiner rejected all of
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the pending claims in the ‘842 Application in view of several references, including
Taki and Lonberg. (Id. at 276.) Regeneron’s appeal of the rejection is pending. As
with the ‘473 Application, the role Brüggemann and Taki played in the rejection of
the claims in the ‘842 Application that are similar to the claims in the ‘018 Patent
tends to prove the materiality of those references.
In another example, U.S. Patent Application No. 13/719,819, several claims
were so similar to those in the ‘018 Patent that the Examiner initially rejected them
on grounds of nonstatutory double patenting. (DX 18, at p. 164-65.) The Examiner
also rejected these claims, which it labeled “not patentably distinct from” the claims
in the ‘018 Patent, on the ground that Taki, when combined with Lonberg and other
references, made the claims in the ‘819 Application so “prima facie obvious” that
they only amounted to “combining prior art elements according to known methods
to yield predictable results,” and in a manner that “[o]ne of ordinary skill in the art
would be motivated to do.” (Id. at 163.) This rejection is probative of how Taki
would have been material to the decisions of the Examiner during prosecution of the
‘018 Patent, had it been disclosed.
A final relevant example is U.S. Patent Application No. 14/036,514. (DX 25.)
Like several of the claims in the ‘819 Application, claims 1-16 of the ‘514 Application
were rejected as an attempt at double patenting in view of claims 1-20 of the ‘018
Patent. (Id. at 96.) The Examiner also rejected these claims as obvious in view of
the combination of certain references disclosed during prosecution of the ‘018 Patent
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(Lonberg and Kucherlapati) with three of the Withheld References (Wood, Taki, and
Brüggemann). (Id. at 94.)
Regeneron amended the proposed claims in the ‘514 Application. One of the
amendments added an additional limitation of “operably linked” in claims 17 and 19
of the application, requiring that the heavy chain variable gene region segments be
“operably linked to a mouse heavy chain constant region gene at an endogenous
mouse heavy chain immunoglobulin locus.” (Id. at 478.) Based on the addition of
the “operably linked” limitation, these claims were then allowed. (Id. at 498.)
Notably, claims 1-5 of the ‘018 Patent do not contain an “operably linked”
limitation.
Regeneron has filed a number of additional patent applications which are
continuations of the ‘976 Application. (See DX 26; DX 27; DX 32; DX 33; DX 19; DX
34.) The prosecution histories of these applications contain issues similar to those
described above.42 The events in the prosecution of those applications are material
to consideration of the claims of the ‘018 Patent. The Court finds those events,
which include negative actions by the PTO in light of the Withheld References, to be
probative of those references’ but-for materiality.
B.
European Patent ‘287
European Patent 1,360,287 B1 (“EP ‘287”) is the European counterpart to the
‘018 Patent. A Regeneron press release refers to them as “similar” and that they
both have “claims covering genetically modified mice that have unrearranged
For instance, claims of U.S. Patent Application No. 14,046,291 were rejected over Wood. (Davis Tr.
Decl. ¶¶ 188-91.)
42
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human variable immunoglobulin variable region gene segments at endogenous
mouse immunoglobulin loci." (DX 180.) Dr. Davis testified credibly that one skilled
in the art would understand the claims in EP ‘287 to be materially similar to those
in the ‘018 Patent. (Davis Tr. Decl. ¶ 239.)
In June 2013, pursuant to procedures allowed in Europe, Merus filed an
Opposition against EP ‘287. (DX 64.) A hearing was held on September 16 and 17,
2014. (DX 65.) The Taki reference was specifically included as part of the
argument against patentability. Following that hearing, the Opposition Division of
the European Patent Office revoked EP ‘287 in its entirety. (DX 69 at sheets 2, 8-9.)
Referring to Taki, the Opposition Division stated:
[Regeneron] argues that D4 does not provide the skilled person with
the motivation to use in situ replacement but merely discloses the use
of a transgene. D4 teaches on pages 74-76 the inactivation of the
endogenous mouse immunoglobulin loci by homologous recombination.
Therefore starting from D4 [Lonberg] the skilled person would be
motivated to insert the hybrid locus and to inactivate the endogenous
locus by homologous recombination. D7 [Taki] teaches the
simultaneous integration of a transgene and the inactivation of the
endogenous immunoglobulin heavy chain locus by homologous
recombination. D7 [Taki] further teaches that targeting the transgene
in the endogenous locus has the advantage of a proper regulation of the
locus (see D7 [Taki], page 1268, first column). (Id. at sheet 22; ECF
No. 241 ¶¶ 148, 150.)
C.
Knowledge
The evidence establishes that Dr. Smeland knew of the Withheld References
and the European Opposition Briefs during prosecution of the ‘018 Patent. (See DX
16; DX 17; DX 23; DX 64; DX 65; DX 178 at p. 2; DX 179 at p. 7; DX 840, Smeland
Dep. Tr. at 265:25-266:5; DX 349.) Dr. Murphy had knowledge of at least Zou and
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Brüggemann prior to the issuance of the ‘018 Patent. (DX 178, Regeneron’s Third
Supp. Response to the Court’s Interrogs. 1 and 2.)
IX.
MISCONDUCT
A.
Patent Prosecution Misconduct
Merus alleges that Regeneron committed affirmative egregious misconduct in
connection with prosecution of the ‘018 Patent. This conduct included (1)
statements in the specification disproven by Regeneron’s own subsequent patent
applications (Davis Tr. Decl. ¶¶ 257-72); (2) the specification making inaccurate or
incomplete statements with regard to the use of LTVECs (Id. ¶¶ 273-87); and (3) a
presentation to the PTO which contained statements that Regeneron knew at the
time to be false. The Court agrees.
1.
Representations regarding probing
The specification describes not only targeted insertion but also a method to
probe to locate and confirm such insertion. The specification describes this portion
of the invention as “An analysis to determine the rare eukaryotic cells in which the
targeted allele has been modified as desired, involving an assay for modification of
allele (MOA) of the parental allele that does not require sequence information
outside of the targeting sequence, such as, for example, quantitative PCR.” (‘018
Patent, 3:21-26.) Various embodiments include using a quantitative assay to detect
modifications of allele (MOA) in the eukaryotic cells (see, e.g., id., 3:36-38, 4:24-28,
4:58-60), or “a method wherein the quantitative assay comprises quantitative PCR
…” (Id., 3:53-54.) Figures 3A-D of the Patent are tables of numbers described as
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“Sequence of the mouse OCR10 cDNA (upper strand, SEQ ID NO:5), homology box 1
(hb1), homology box 2 (hb2), and TAQMAN probes and primers used in a
quantitative PCR assay to detect modification of allele (MOA) in ES cells …” (Id.,
8:19-23.)
The specification specifically states that the assay “does not require sequence
information outside of the targeting sequence” (id., 3:24-25) and that “it is not
necessary to know the complete sequence and gene structure of a gene(s) of interest
to apply the method of the subject invention to produce LTVECs” (id., 11:22-25) and
finally that “[e]ukaryotic cells that have been successfully modified by targeting the
LTVEC into the locus of interest can be identified using a variety of approaches that
can detect modification of allele within the locus of interest and that do not depend
on assays spanning the entire homology arm or arms.” (Id., 13:65-14:2.)
Dr. Davis persuasively opines that these statements create the inaccurate
impression that to probe for a modification, a scientist need not know the sequence
of the mouse Ig loci, but need only probe the sequence targeted, and that this was
incorrect. (Davis Tr. Decl. ¶ 259.) The evidence as amassed and described by Dr.
Davis clearly demonstrates that to confirm an appropriate targeting, one would
need to know the full sequence of the mouse Ig loci and probe not just the region
targeted but the flanking region (the integrated DNA and the regions flanking the
integrated DNA); Regeneron did no possess this information when it filed the
application in February 2001. (Id. ¶¶ 260-72.) Internal documents reveal that the
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probing strategy discussed in the specifications was first carried out after February
16, 2001. (Id. ¶ 264.)
In addition, a complete sequence of the locus is necessary because certain
regions, including the mouse Ig heavy chain, are repetitive; one cannot probe for a
loss of allele and be certain that the result obtained is accurate. (Davis Tr. Decl. ¶
265.) Another internal Regeneron presentation from 2002 identifies as one of the
“challenges” the fact that the “locus is more complex (repetitive) than any other
targeted by VelociGene . . .” and “LOA/TaqMan Screening – additional probes
required due to locus complexity.” (Davis Tr. Decl. ¶ 267, DX 165.)
2.
‘018 Patent’s LTVEC description
Dr. Davis persuasively opines that the specification’s statements regarding
the use of LTVECs is incomplete and/or inaccurate. (Davis Tr. Decl. ¶ 273.) The
evidence suggests that Regeneron lacked the necessary DNA sequence information
to construct a targeting vector with the 5’. As stated elsewhere in this Opinion,
Regeneron did not know the 5’ end of the mouse Ig locus in 2001. (Id. ¶¶ 274-75; DX
71; DX 94.) But the specification of the ‘018 Patent nonetheless described a LTVEC
in which a homology arm was the 5’. (DX 337, Murphy Dep. Tr. at 200:20-201:22;
‘018 Patent 22:32-45.)
Moreover, the evidence demonstrates that as of February 2001 Regeneron
could not, in fact, accomplish the very large insertions described by the ‘018
Specification. (Davis Tr. Decl. ¶¶ 285-87.) In a 2003 presentation, Dr. Murphy
informed the Regeneron board that manipulation of the large loci required
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development of proprietary technology. (DX 161.) That statement is contrary to the
representations to the PTO in a presentation in January 2013 that the
VelocImmune mouse is “made” by the claimed methods. (DX 002.)43 “Proprietary
technology” is not disclosed technology; the disclosures in the specifications of the
‘018 Patent were, therefore, insufficient to practice the invention. Without access to
the proprietary technology referred to in this presentation one skilled in the art
could not have manipulated the large loci.
3.
Presentation to the PTO
Merus’s third point on affirmative egregious misconduct is that a January
2013 presentation, authored by Dr. Murphy and provided to the PTO by Dr.
Smeland, had several false statements. The Court agrees; this is a finding of fact.
The presentation at issue is that discussed earlier in this Opinion in connection
with the prosecution history of the ‘018 Patent. In the presentation to the PTO,
Regeneron made the following statements:
1.
The mouse disclosed in the ‘018 Patent was the VelocImmune
mouse “[c]reated only by virtue of VelociGene and VelociMouse
technologies.” (DX 2 at 215.)
2.
The “[p]recisely humanized Ig genes in the [VelocImmune]
mouse function more efficiently than previous platforms.” (Id. at 215.)
Dr. Oettinger responds to each of Dr. Davis’s points here – but her counterarguments are
unpersuasive. For instance, her response to the need for a complete sequence is that one only needs
some of the sequence to detect a modification. This ignores, however, that the detection here is
focused on the insertion. To detect the insertion as discussed in the Patent, Dr. Davis has
persuasively opined, the complete sequence is necessary. (Davis Tr. Decl. ¶¶ 291-92.) Use of the
MOA assay as instructed by the Patent only works with sequence information of the targeted region
of the host.
43
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3.
The “VelocImmune Solution” indicates that Regeneron had in
fact replaced 3 Mb of the endogenous mouse IgH locus I with 150 kb of
human genes in a single step. (Id. at 224.)
4.
A list of characteristics of the VelocImmune mouse are compared
to a “normal mouse”: normal somatic hypermutation, normal serum
levels for all Ig isotypes, normal kappa:lambda light chain ratios, etc.
(Id. at 227.)
5.
The VelocImmune mice display “normal B cell populations in the
spleen and lymph nodes” and show “normal B cell differentiation.” (Id.
at 228-29.)
The evidence is overwhelming that at the time the ‘176 Application was filed,
there was no VelocImmune mouse and these results did not exist. But worse, some
of the results referenced in the presentation could not have existed. (Davis Tr. Decl.
¶¶ 307-30.) For instance, as of February 2001 and for a number of years thereafter,
Regeneron lacked information concerning the size, composition, and regulatory
elements associated with the endogenous mouse loci. (DX 145 at pp. 10055692-94;
DX 166 at p. 804; DX 160 p. 241; DX 161 at p. 70; DX 37 at 9174-84.)
The lack of capability to make the necessary large DNA vectors with large
homology arms frustrated enablement. (PX 835, Murphy Dep. Tr. at 141:17-22.) Dr.
Murphy acknowledged that his team went a year believing that they had target
locations for the proximal and distal regions of the locus, but that they had been
wrong. (Id. at 158:3-10.) Despite this, Dr. Smeland argued to the Examiner that an
embodiment of the claims – the VelocImmune mouse – was superior to the prior art.
At the March 11, 2013 meeting with the PTO, Dr. Jones, supervised by Dr.
Smeland who had retained him and was present, told the Examiner that the
VelocImmune mouse was the embodiment of the claimed invention, and was “only
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possible through VelociGene technology.” (PX 840, Smeland Dep. Tr. at 232:14233:15.) The emphasis and focus at this meeting, according to Dr. Smeland, was
expressing Regeneron’s view that the Examiner’s prior rejections of the claims in
the ‘176 Application, which had been based in part on Lonberg, were incorrect
because Lonberg taught random rather than targeted insertion. (Id. at 246:6-13.)
But Dr. Davis persuasively establishes that while this feature may have
distinguished the ‘176 Application from Lonberg, it did not distinguish it from the
prior art contained in the Withheld References, which a person skilled in the art
would have understood to provide the motivation and instructions for the relevant
insertion. (Davis Tr. Decl. ¶¶ 385-88.)
In addition to the clear evidence that the VelocImmune mouse did not exist
at the time of the filing of the ‘176 Application, the description of its characteristics
once it did exist was misleading. Dr. Davis persuasively explains that one familiar
in the art and aware of Taki and Zou would not find the VelocImmune mouse’s
comparability to a “normal mouse” on a number of criteria at all unexpected. (Davis
Tr. Decl. ¶¶ 347-53.)
The Court finds by clear and convincing evidence, and without need for
application of an adverse inference, that Regeneron made false and misleading
statements. The Court finds by clear and convincing evidence that this constitutes
egregious affirmative misconduct.
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B.
Discovery and Trial Misconduct
1.
Claim Construction
From the outset, this Court has been concerned about Regeneron’s litigation
tactics. Early on, when the Court’s Individual Patent Rules required that
Regeneron disclose to Merus its infringement contentions, broken down by element,
(See Indiv. Patent Rules 1(a)(iii).) Regeneron claimed that it could not comply.
Instead, Regeneron provided a chart with infringement contentions that listed each
claim as consisting of a single limitation – that is, a single element. Merus moved
to compel – seeking real infringement contentions. (See ECF No. 76.) In that same
motion, Merus also moved to compel production of documents as required by the
Court’s rules relating to the conception and reduction to practice of the ‘018 Patent.
Regeneron claimed to have very few such documents and did not include in its
production a key document written by Dr. Murphy, one of the inventors, setting
forth the ‘018 Patent’s conception and reduction to practice. (DX 145.)44
The Court issued a written decision in response to Merus’s motion to compel
Regeneron to detail its infringement contention. (ECF No. 82.) At a subsequent
conference, the Court discussed its concerns with Regeneron’s conduct and gave
Regeneron an opportunity to correct it. Regeneron chose not to. In both its order
and at that conference, the Court noted that the infringement claim that Regeneron
This document – which, as to certain facts such as enablement and location of the 5’, one could
reasonably call a “smoking gun” – was not among those initially produced. Only when Merus later
learned of the document’s existence did Merus move to compel its production, a motion the Court
granted. (ECF No. 182.)
44
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had asserted – as with all infringement claims – required an element-by-element
identity between the accused product and the ‘018 Patent. See Abbott Labs. v.
Sandoz, Inc., 566 F.3d 1282, 1296 (Fed. Cir. 2009). The Court stated explicitly, both
in its written decision on this issue and at a hearing held soon thereafter, that it
was troubled by Regeneron’s refusal. At that time, experienced patent counsel
(subsequently replaced by Regeneron’s trial counsel here) asserted that he did not
understand what the Court was asking for or how to break a claim down into
elements. This made no sense and was clearly a tactical choice – seeking to shift
the plaintiff’s burden in an infringement case to define the elements of a claim to
the defendant, maintaining maneuvering room as a result. In retrospect, the
reasons for this choice have become clear: an element-by-element breakdown of the
claim eliminates the host of additional, non-claim specific limitations that are
necessary for Regeneron to prevail.
The shenanigans continued.
During claim construction, Regeneron again chose tactics over substance. As
the plaintiff, the Court’s rules required that Regeneron propose its claim
constructions, then that the defendant respond. (See Indiv. Patent Rule 2(a)(i),
2(c)(i).) Regeneron took the position that no terms required construction. The
Court issued an order (ECF No. 81) expressing its concern that Regeneron was
attempting to “game” the system by shifting the burden to Merus to propose
constructions and then to take shots at those proposals. The Court required
Regeneron to live by its plain language constructions. (The short-sightedness of
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Regeneron’s position is all the more clear in light of the extensive constructions
offered by Dr. Oettinger.)
Questionable conduct continued.
2.
The Jones Memo
Although the conduct relating to what is referred to as the “Jones Memo” is
not the primary basis for the Court’s instant decision to impose sanctions, is worth
reviewing for multiple reasons. First, it follows the pattern of misconduct the Court
has already described. Second, Regeneron has sought to use it as a cloak for the
misconduct that is the primary bases for the Court’s sanctions decision: the broad
waivers effectuated by the Smeland declaration and the host of discovery issues
revealed by the Court’s ensuing review of Regeneron’s privilege log. When, as
discussed below, Regeneron broadly waived the privilege in the Smeland trial
affidavit but argued it was justified in nonetheless maintaining its privilege as to
numerous documents on the same topics on its privilege log, its confusing defense
was that, as it had complied with the Court’s waiver order regarding the Jones
Memo, an entirely different issue, it had no obligation to make such disclosure. The
Court still cannot understand how an order on waiver as to one situation could
provide any reasonable basis for failure to disclose in another.45
The Jones Memo issue developed as follows. Discovery was in process and
depositions ongoing. On the eve of Dr. Jones’s deposition, Regeneron made a
tactical decision to disclose a helpful chart and memorandum Dr. Jones had
Much of the Court’s discussion on the Jones Memo issue is also set forth in other orders. (ECF
Nos. 223, 272.) The Court includes this summary for convenience.
45
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prepared in connection with his review of whether to disclose the Withheld
References during patent prosecution. These materials had previously been listed
on Regeneron’s privilege log on the basis of attorney-client privilege.46
Merus asserted a broad privilege waiver and brought a motion to compel.
(ECF No. 203.)
The evidence presented to the Court on that motion demonstrated that on
November 7, 2013, Dr. Jones had attached the chart to an email to Dr. Smeland,
and wrote, “While we discussed this analysis in numerous calls, I don’t know if I
have ever sent you this document. For your records, I have also attached a memo I
drafted regarding the third-party disclosures made in the other U.S. case.” (ECF
No. 223.) That email was forwarded to Regeneron’s then outside counsel on the
same day. On November 11, 2014, Regeneron’s outside counsel wrote an email to
Regeneron stating, “I believe Brendan also discussed his analysis with Tor around
the time that Brendan prepared these memos.” That same e-mail notes that Dr.
Jones “was asked to analyze [] whether certain references that came up in the
European Opposition and the Third Party Submission should be disclosed to the
PTO”, and that “[t]here are several documents that he prepared on this subject in
late June 2013.”
In fact, the memorandum, written by Dr. Jones on June 28, 2013, appeared
in all respects to be formatted and have the content of a legal memo to Regeneron –
though it is designated as a memo to file. Printed on Foley Hoag letterhead and
As described above, Dr. Jones was the outside patent attorney retained to represent Regeneron in
the final stages of prosecution of what became the ‘018 Patent.
46
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beginning with entry lines for “to”, “cc”, “from” and “regarding”, the memo read
“Privileged and Confidential,” began with a summary section, contains footnotes,
and is organized under formal headings. It described basic standards for the duty
to disclose prior art, and analyzes the materiality of three publications. The memo
amounted to an elucidation of the rationale underlying the charts and is
inextricably connected to the charts. The document was plainly one created in
connection with Dr. Jones’s provision of legal advice to Regeneron.
The references to discussions of the chart and analysis made clear that Dr.
Jones analyzed the prior art and arrived at a legal conclusion regarding a disclosure
obligation as part of his advisory role to Regeneron. He contemporaneously
communicated the substance of the very same advice to his client. The Court found
that Regeneron’s argument in opposition to the motion to compel – that the
documents were not privileged because Dr. Jones had merely used them to assist
himself in connection with some professional obligation unrelated to his advisory
role to Regeneron – was “seriously incorrect.” (ECF No. 223 at 7.)
As part of its inquiry into this waiver – now called the Jones Memo issue –
and particularly for the purpose of understanding what the universe of documents
were that would be implicated by such waiver, the Court requested that Regeneron
provide it with “[a]ll documents relating to groups or individuals who at the time of
creation or subsequently thereto received a copy of the chart or memo” and “[a]ll
documents and communications ... referring or relating in any way to Dr. Jones’s
chart and memo.” (ECF No. 214 (emphasis added).) The Court sought these
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documents for its in camera review and anticipated that all documents discussing
the materiality or cumulativeness of the Withheld References that had been
withheld on the basis of privilege would be included in any such production.
Regeneron subsequently provided a single binder to the Court containing
what it represented constituted the universe of such materials (subject to an explicit
disclosure as to that which it had held back, which related solely to certain specified
litigation materials). (ECF No. 223 at n.2.) The Court was thus led to believe that it
had before it all of the documents that related “in any way” to Dr. Jones’s chart and
memo. As it has turned out, this was not the case. Regeneron had not in fact
provided the Court with the entire universe, but had sua sponte imposed its own
limitation that required any documents be directly related to the chart and memo –
not “in any way” related, as the Court’s order required. Thus, the Court’s intention
to include all documents concerning the subject matter was circumscribed – and
appears to have included only documents directly and explicitly related to the chart
and memo themselves. The Court believed the binder provided insight into all that
was at issue; but the Court was in a dark room and mistook the leg of an elephant
for a pillar. The Court ruled on the motion.
Because Regeneron affirmatively produced these two documents to Merus
prior to a deposition, believing they were helpful,47 it waived the attorney-client
On November 12, 2014, David Gindler, then Regeneron’s outside counsel, recommended disclosing
the particular documents as they “provide a helpful and concise contemporaneous summary” and a
“thoughtful overview of all the prior art.” (ECF No. 223 at 9.)
47
98
privilege with regards to the same subject matter.48 The Court found that this
presented a classic “sword and a shield” issue. See In re Grand Jury Proceedings,
219 F.3d 175, 182 (2d Cir. 2000); United States v. Bilzerian, 926 F.2d 1285, 1292
(2d Cir. 1991). The Court ordered that “Regeneron and Foley Hoag [] produce to
Merus all relevant documents concerning the decision to not disclose prior art
during the patent prosecution.” (ECF No. 223 at 9.) The Court assumed that this
covered the universe and that the universe was thus contained in the binder. Only
Regeneron knew what in fact existed.
In retrospect, given this internal line drawing that only Regeneron
understood, it should have come as no surprise that there was a dispute as to the
scope of the waiver. The Court approached the dispute based on its experience on
A party may not use the attorney-client privilege as both a “sword and a shield”. See United
States v. Bilzerian, 926 F.2d 1285, 1292 (2d Cir. 1991); In re von Bulow, 828 F.2d 94, 103 (2d Cir.
1987). “In other words, a party cannot partially disclose privileged communications or affirmatively
rely on privileged communications to support its claim or defense and then shield the underlying
communications from scrutiny by the opposing party.” In re Grand Jury Proceedings, 219 F.3d 175,
182 (2d Cir. 2000); see also Bowne of New York City, Inc. v. AmBase Corp., 150 F.R.D. 465, 474 (2d
Cir. 1993) (the privilege can be waived when the “privilege holder releases only communications or
portions of communications favorable to his litigating position, while withholding any unfavorable
ones”); Bilzerian, 926 F.2d at 1292 (there is an implied waiver of the privilege when a party “asserts
a claim that in fairness requires examination of protected communications”). Courts make
determinations of waiver on a case-by-case basis, taking into account, inter alia, whether a party’s
disclosure was demonstrably prejudicial to the other party. In re Grand Jury Proceedings, 219 F.3d
at 183. The Supreme Court has noted that “[p]arties may forfeit a privilege by exposing privileged
evidence, but do not forfeit one merely by taking a position that the evidence might contradict.”
United States v. Salerno, 505 U.S. 317, 323 (1992).
Waiver of the privilege “allows the attacking party to reach all privileged conversations regarding a
particular subject once one privileged conversation on that topic has been disclosed.” In re von
Bulow, 828 F.2d at 102-03; see also United States v. Jacobs, 117 F.3d 82, 89-90 (2d Cir. 1997)
(petitioners waived attorney-client privilege to a document where they disclosed the substance of the
opinion at issue while withholding the actual document), abrogated on other grounds by Loughrin v.
United States, 134 S.Ct. 2384 (2014). However, the attacking party should not reach beyond those
matters that were actually revealed where “disclosures of privileged information are made
extrajudicially and without prejudice to the opposing party.” In re von Bulow, 828 F.3d at 103
(dealing with the publication of a tell-all book about the high-profile defense of Claus von Bulow).
48
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the prior motion and in light of the binder of privileged documents previously
provided. Regeneron represented that it had produced:
all documents and communications related to any decision, analysis or
advice by Dr. Jones or anyone at Regeneron on whether or not to
disclose references from Dr. Jones’ charts and memo during
prosecution of the ‘018 patent. In searching for this information,
Regeneron: searched documents from Messrs./Drs. Pobursky, Kang,
Gregg, Yang, Smeland, Yancopoulos, Sheasby, Murphy, Stevens,
MacDonald, Karow, Valenzuela, and Economides… (ECF No. 262, Exh.
12.)
Regeneron also asserted broadly that it had produced all of its communications or
attachments thereto from the time period of the prosecution of the ‘018 Patent “that
even mentioned the content of any of the references cited” in the chart and memo.
(ECF No. 261, pp. 7-8 (first emphasis in original, second emphasis added).)
Regeneron argued against Merus’s request to impose sanction for non-compliance
with the Court’s order by stating that it had explained to Merus that its production
was tailored to the subject matter of the Jones documents. Regeneron also argued
that broader disclosure could result in serious prejudice as it could impact a
pending appeal it had for EP ‘287, which was then in the midst of being briefed.
(ECF No. 261, p. 8.)
At that time, the Court viewed the issue as a good-faith dispute over the
scope of the Court’s December 5 Order and read Regeneron’s representations as
statements that any references in any of its privileged documents to the Withheld
References during the appropriate timeframe had been produced. As subject matter
waiver seeks to readjust the essential unfairness in disclosing part, but not all, of
an attorney-client communication, see In re Claus von Bulow, 828 F.2d 94, 101, 102100
03 (2d Cir. 1987), the required remedy should be addressed to that particular
unfairness. See In re Grand Jury Proceedings, 219 F.3d 175, 182 (2d Cir. 2000).
In terms of scope, and of course based on what the Court believed was the
universe of documents at issue, the Court sought to determine what – in fairness –
Merus needed to receive to avoid the sword/shield issue. The Court determined that
fairness required Regeneron to produce any documents which reflected additional
thoughts, concerns and considerations given to whether certain references should
have been disclosed. Put another way, if it turned out that there were other memos
or communications related to the prosecution of the ‘018 Patent which stated that
such references should be disclosed to the PTO, those memos or communications
would have to be produced. Included within this would be drafts of Dr. Jones’s chart
or memo which might have contained a different conclusion, memos of others who
questioned Dr. Jones’s conclusion, and the like.
The Court found that the Order did not encompass the entirety of all things
which Regeneron had an obligation to disclose to the PTO generally, nor did it
extend to Regeneron’s analysis of draft claim language. It also did not necessarily
extend as far as requiring all consideration of all disclosures for other patents, even
in the same family. The Court required Regeneron to confirm to Merus that it had
produced or would produce:
1. All documents from anyone involved directly or indirectly in
prosecuting the ‘018 Patent, relating to whether prior art should be or
should have been disclosed as part of the prosecution of the ‘018
Patent….
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2. To avoid any doubt, the following documents are included within
the scope of the above directive:
a. All documents of any kind from the files of Dr. Jones and
others with whom he worked on the prosecution of the ‘018
Patent regarding whether or not to disclose prior art to the PTO.
b. All documents of any kind from the files of anyone else who
was involved (directly or indirectly) in the prosecution of the
‘018 Patent and who may not be captured in paragraph 1 above,
who gave consideration to the relevance or applicability of prior
art to the ‘018 Patent. (ECF No. 272, pp. 6-7 (emphasis added).)
Regeneron confirmed it had produced what was required.
3.
The Smeland Trial Affidavit
These events lead us up to trial. A bench trial on Merus’s claim of
inequitable conduct was scheduled to commence on June 8, 2015. On May 29, 2015,
and in compliance with this Court’s rules which require a party’s witnesses to
testify by declaration/affidavit on direct (subject to live cross-examination and redirect), Regeneron submitted trial affidavits from Drs. Smeland and Jones, both
attorneys acting as attorneys. At this time, Regeneron’s privilege log indicated that
it had withheld many documents from Dr. Smeland’s files and that he had authored
or received on the basis of the attorney/client privilege and/or work product
doctrine. The same was true with regard to Dr. Jones except as to those which
Regeneron had earlier produced following the motion practice described above.
Merus cried foul. It argued that Regeneron was again engaging in a
sword/shield use of the attorney client privilege and moved to strike these affidavits
based on, inter alia, the assertion that Regeneron had shielded privileged
documents from disclosure that were now directly implicated by the trial
declarations. According to Merus, the Jones Trial Affidavit relies heavily on
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information that Regeneron failed to disclose during fact discovery and in response
to the Court’s prior waiver order. In particular, Merus cited Dr. Jones’s deposition
testimony that apart from a phone call that he had made to the PTO to schedule a
meeting, he could not recall a single other communication with the Examiner
during the ‘018 Patent prosecution. Late-produced billing records were now
referenced in Dr. Jones’s trial affidavit. The issue was, if anything, far worse with
regard to Dr. Smeland. With regard to Dr. Smeland, Merus argued that he was now
proposing to testify as to his views regarding the meaning of claim language and
broadly regarding his subjective understanding of the meaning of various aspects of
the Withheld References, when Regeneron had withheld from its production
numerous documents on those topics on the basis of privilege.
The Court reviewed each of the trial affidavits. The Court agreed that a
comparison of these affidavits with entries on Regeneron’s privilege logs raised a
number of concerns. In his affidavit, Dr. Smeland made dozens of assertions
regarding his understanding of the scope of the invention in the ‘176 application, his
state of mind, and what he knew and thought about each of the Withheld
References at the time of patent prosecution continuing up to “today.” While the
Court will not recite all of his assertions in this regard, a lengthy list is appropriate
given the seriousness of the issue and to demonstrate obvious breadth of the
waiver49:
The Court’s references are to the “revised” Affidavit for Dr. Smeland. On June 4, 2015, after
waiving privilege with the submission of the declarations on May 29, 2015, Regeneron sought to
voluntarily withdraw portions of the Smeland declaration. At that point, Regeneron could not put
the genie back in the bottle. In any event, efforts to withdraw selected portions of the declaration did
49
103
“I firmly believed – and still believe today – that Brüggemann,
Taki, Zou and Wood were not material to patentability because
they were substantially different from the mice claimed in the
‘176 application … and were cumulative of other information
before the Patent Examiner.” (Smeland Aff. ¶ 4 (emphasis
added).)
“I considered the statements made in the Merus and Kymab
Oppositions as attorney argument and not material to
patentability.” (Id. (emphasis added).)
“I believed—and still believe today—that the statements I made
and the information that I provided to the Patent Office were
not false and were not misrepresentations.” (Id. (emphasis
added).)
He was responsible for prosecution of the ‘473 Patent
Application and its “claims were directed to specific steps of
making modifications to genes within organisms, but were not
directed to a mouse with a human variable region inserted at its
endogenous mouse immunoglobulin locus (i.e., a reverse
chimeric mouse) in its germline as were later prosecuted in the
‘176 application.” (Id. ¶ 23)
He has an extensive discussion of his actions and bases for those
actions in connection with prosecution of the ‘473 Application
(Id. ¶¶ 24-29). He stated, “[i]t was my view that an ordinary
skilled artisan would not have understood that Brüggemann, in
combination with other art, taught or disclosed the pending
claims in the ‘473 application.” (Id. ¶ 25 (emphasis added).)
He states further, “[g]iven my responsibilities with preparing,
filing, and prosecuting applications that are part of the 780
docket [the family of patents related to the ‘018], I gained an
extensive and in-depth understanding of the prior art and
Regeneron’s inventions.” (Id. ¶ 35.)
With regard to the ‘018 Patent, he states, “[a]s I understood the
claim during prosecution of the ‘176 application, it encompasses
not change the fact that Smeland’s declaration remained focused on his state of mind at the time of
patent prosecution. For example, Regeneron sought to strike “and still believe today” from the
fourth paragraph of the Smeland declaration: “I firmly believed – and still believe today – that
Brüggemann, Taki, Zou and Wood were not material to patentability . . .” The remaining portions of
the declaration still implicate a broad waiver of the privilege.
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a mouse with a functional reverse chimeric immunoglobulin
locus in its germline DNA. … As is clear from the specification,
the reverse chimeric locus must be functional… The ‘018 Patent
invention describes the first such mouse of which I am aware.”
(Id. ¶ 37 (emphasis added).)
“I stated this understanding of the claims in my communications
with the Patent Office during prosecution of the ‘176
application.” (Id. ¶ 38.)
“It was not my understanding that the ordinary skill artisan
would have the view that mice of the ‘018 Patent claims must be
made using any particular method or assays.” (Id. ¶ 39
(emphasis added).)
“One of the advantages of the ‘018 Patent inventions includes
the fact that mice encompassed by the claims have ‘natural’ Bcell development processes along with the ability to obtain high
affinity reverse chimeric antibodies.” (Id. ¶ 40.)
“I believed that the Examiner misunderstood Lonberg, which
disclosed transgenes randomly inserted at unknown loci. …
Lonberg recognized that the rearranged variable region of a
randomly inserted human segment could sometimes join to a
portion of the endogenous mouse immunoglobulin, resulting in
an antibody consisting of human variable and mouse constant
heavy chain (although not in the germline). … It is not possible
to breed Lonberg mice so as to have reverse chimeric loci in the
germline.” (Id. ¶ 46 (first emphasis added).)
“On January 11, 2013, I amended the claims and again
explained why the disclosures in Lonberg did not anticipate the
claimed inventions. … I also…pointed out that Regeneron’s
VELOCIMMUNE mice, which I understood were embodiments
of the claims, exhibited features that were unexpected in light of
the prior art.” (Id. ¶ 49 (emphasis added).)
“I believed that [the Examiner] was misunderstanding the
science and Lonberg as well as the difference between the
Lonberg reference and the claims. As a result, I decided to
appeal…” (Id. ¶ 51 (emphasis added).)
“I expected the appeals process to take a year and a half or
more, but I was confident that the Examiner was
105
misunderstanding Lonberg and that the Board would agree.”
(Id. ¶ 52 (emphasis added).)
“I filled Dr. Jones in on the status of the ‘176 case and, after Dr.
Jones was engaged, he suggested that we set up an in-person
interview with the Examiner to see if Lonberg could be better
explained in person prior to moving forward with an appeal.”
(Id. ¶ 53.)
“…the EP ‘287 Patent inventions related to reverse chimeric
modifications…” (Id. ¶ 61.)
In footnote 21 Dr. Smeland describes his understanding of what
a materiality analysis for inequitable conduct involves:
“Regardless of whether I satisfied the minimum requirements of
being an ordinary skilled artisan, I felt comfortable evaluating
the art from that perspective during the prosecution of the ‘176
application. When I did have questions, however, I did not
hesitate to reach out to those with more experience and
knowledge.” (Id. ¶ 70 n.21.)
“I routinely made Regeneron inventors aware of the foregoing
obligations when providing them with invention declarations.”
(Id. ¶ 73.)
With regard to the Withheld References, “I did not believe that
the information contained in the foregoing references and
oppositions was material to patentability…” (Id. ¶ 74 (emphasis
added).)
With regards to Brüggemann and Zou, “I was generally familiar
with the subject matter of those two references… [a]t no time
did I consider these references to be material to patentability to
the claims pending in the ‘176 application.” (Id. ¶ 75 (emphasis
added).)
“Because of this experience [prosecuting the ‘176 application as
well as the ‘287 Patent], I was readily familiar with both prior
art that was before the Examiner in the ‘176 application and the
pending claims of the ‘176 application.” (Id. ¶ 76 (emphasis
added).)
“I viewed the analysis [relating to the Withheld References] as
straightforward.” (Id. ¶ 78 (emphasis added).)
106
“I concluded that [the Withheld References], alone or combined
with other prior art of which I was aware, were cumulative of
information already before the Examiner. Furthermore, it was
my view that the skilled artisan would not have viewed them as
teaching the reverse chimeric inventions that the Examiner had
allowed in the ‘176 application.” (Id. ¶ 79 (emphasis added).)
Dr. Smeland stated his rationale for not filing a Request for
Continued Examination. (Id. ¶ 80).
Dr. Smeland then proceeded to make a number of detailed
statements regarding his views and understanding of the
technology in each of the Withheld References and comparing it
to the claims in the ‘176 application. (See id. ¶¶ 83-115.) As to
each, he states what he “believed” at the time, and that he
continues to hold that belief “today.” (E.g., id. ¶¶ 88, 94, 102,
114.)
Dr. Smeland then testifies as to the meaning of claim terms in
the ‘018 Patent. (See id. ¶¶ 129-135.)
With regard to the slide presentation to the PTO, he again
makes a number of assertions as to why he believes each of the
statements contained in that document are true; he states,
“Finally, given that I understand that the presentation was
prepared for internal use and I did not alter any slides, I highly
doubt that those who prepare the presentation intended to
mislead others at Regeneron.” (Id. ¶ 143 (emphasis added).)
With regard to the MOA assay, he states, “[d]uring the
prosecution of the ‘176 application I did not believe that the
pending claims required use of any particular MOA assay.” (Id.
¶ 144 (emphasis added).)
Dozens of pages that follow containing state of mind assertions
as well.
These statements and others implicate Dr. Smeland’s knowledge and state of
mind directly – both during patent prosecution and continuing to date. He is using
these statements to counter Merus’s assertion that he acted in bad faith by
discussing what he knew, believed, understood, communicated, etc. There is
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certainly a good tactical reason to confront Merus’s position with testimony from Dr.
Smeland. However, that tactical choice must occur in the context of other choices
made throughout the litigation – choices as to whether to waive attorney-client
privilege or not. Here, Regeneron made a litigation choice to maintain the attorneyclient privilege as to Dr. Smeland’s work with regard to prosecution of the ‘176
application and his knowledge and thoughts regarding the Withheld References
generally over time and specifically with regard to the prosecution of the ‘176
application. In maintaining its assertion of privilege on these topics, Regeneron
used the protections of the Federal Rules of Civil Procedure to shield Dr. Smeland’s
documents relating to those topics from disclosure. This was a choice that was
within Regeneron’s discretion – but not a choice that allows them to have it both
ways at trial. By making the choice to maintain the privilege and withhold the
documents, Regeneron chose the tactical path of not delving into state of mind or
knowledge to defend against the claim of inequitable conduct. And of course, given
the heavy burden that a proponent of an inequitable conduct bears of proving
materiality and intent by clear and convincing evidence, this was not an
unreasonable choice. As with any affirmative disclosure of information otherwise
protected by the attorney-client privilege, once the disclosure of the affidavit was
made, as it was not inadvertent, the waiver was complete.
Thus, on the day that Regeneron disclosed Dr. Smeland’s trial affidavit, it
waived the privilege as to the subject matter of each of the topics the affidavit
addressed. This was intentional and permanent. As described above, this included
108
his views on meaning and scope of claim language, understanding of the technology,
materiality (including cumulativeness) of each of the Withheld References. Many of
his documents are to or from Dr. Murphy, while others involve Dr. Jones. And as
noted below, this process revealed a host of withheld non-privileged documents.
Thus, the waiver rippled throughout the case.
The problem, of course, was how this position at trial interacted with
Regeneron’s discovery obligations. In order to take this position at trial, Regeneron
was obligated to have previously produced the documents from Dr. Smeland’s files
that would have allowed Merus to test his various assertions. This would have
substantially altered a significant swath of discovery, including Dr. Smeland’s
deposition, the deposition of others with whom he interacted, expert discovery, and
on. Regeneron did not fulfill its discovery obligations in this regard. That is clear
both from a review of the log and the Court’s in camera review of documents on the
log. There are dozens of documents on Regeneron’s privilege log which are from Dr.
Smeland’s files, and which concern these very topics.50
The Court conducted an in camera review of the documents on the log.
Regeneron was, after all, asserting it had done all it was obligated to do. Merus
pointed to seemingly inconsistent entries on the log. As it turned out, the log was
“Pandora’s Box.” The Court’s in camera review revealed that Merus was certainly
correct – there were dozens of “Smeland documents” as to which the privilege had
now been waived. But the in camera review revealed far more. It revealed
For a more extensive discussion of the documents themselves, the Court refers to the post-trial
briefing of the parties on this issue, including the documents attached thereto.
50
109
additional serious discovery issues: a number of non-privileged 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 pursuant to the order
regarding the Jones Memo issue had not in fact been disclosed.
In all, there were three categories of documents that presented serious
concerns of discovery misconduct:
1.
Non-privileged documents that were not produced and instead have
resided throughout this case on the privilege log (e.g. numerous Excel
spreadsheets with scientific test results, third party filings to the PTO,
fact statements by non-lawyers not seeking legal advice, etc.).
2.
Previously privileged documents as to which Regeneron affirmatively
waived the privilege and that this Court ordered be produced pursuant
to its February 25, 2015 order. (ECF No. 272.)
3.
Documents on the privilege log relating to precisely those topics
waived by Regeneron on May 29, 2015 when it filed its trial
declarations.
The Court determined that failure to make full and adequate production of
documents in the first two categories during the period of fact discovery itself and
independently of the trial misconduct warranted serious sanction. The production
failure is undoubtedly larger than the few exemplars revealed by the Court’s own
review. Given the many thousands of documents on Regeneron’s privilege log, the
Court cannot know the full extent of the problem.
As to the first category, there were spreadsheets related to scientific tests,
published articles, correspondence with third parties – all of which were relevant to
issues in the case. The ultimate importance of the documents in this category is
unclear, but that Merus should have had them long ago is not.
110
In the second category, there are a number of documents on the log which Dr.
Jones is on discussing communication with the PTO, before and after the meeting
on March 2013. These should have been produced as part of the “Jones Memo”
waiver issue.
The third category of documents presents its own very serious issues. Many
documents on the log are directly relevant to the topics as to which privilege has
been waived. Some of those documents contain statements directly contradictory to
Smeland’s sworn trial declaration.
To allow into evidence at trial declarations from witnesses to whom these
three categories of documents relate could only occur – in fairness – if there was a
wholesale re-opening of discovery. As a first step, a top-to-bottom re-review of the
Regeneron privilege log would be necessary. This would have to be followed by
additional document production, fact depositions, and revised expert reports and
depositions. Given the Court’s concerns with Regeneron’s process to date, the Court
would require that any such process only occur with the direct oversight of a special
master. It is clear that this process and the attendant discovery would consume
substantial time and cost. It would also undoubtedly require further judicial
resources. At this point in the litigation, this is not a fair burden for Merus or this
Court.
The Court has considered whether striking the trial affidavits and precluding
Smeland and Murphy from testifying at trial would be a sufficient remedy.51 It
The Court bifurcated the trial. The first determination which must be made in a trial on
inequitable conduct is the materiality of the information. Therasense, Inc. v. Becton, Dickinson &
51
111
would not, though such an order is a minimum starting point. Based on the
considerations discussed below and as set forth in the Court’s prior decision, simply
striking those two declarations and precluding trial testimony from just them would
not sufficiently address the many issues now in play; those issues spread broadly
into the case.
First, the first two categories of documents themselves revealed a separate
need for a re-review of the privilege log, production, and of course depositions as
needed. Second, striking the declarations and precluding certain witnesses alone
fails to remedy the substantial disruption and delay that would be caused by
Regeneron’s conduct. Third, merely striking the declarations and precluding
certain witnesses would fail to recognize Regeneron’s pattern of conduct throughout
this litigation. That conduct included, inter alia, a host of issues at the outset
regarding infringement contentions, positions in relation to claim construction and
positions and representations with regard to the Court’s February 25 Order (the
Jones Memo Order). The Court also understands that current trial counsel was not
responsible for the preparation of the privilege log and was not counsel at the outset
of this case when the first issued occurred (though they were counsel for the Jones
Memo order). In all events, this pattern by Regeneron is just that – a pattern. It is
troubling to say the least. Merely striking the declarations and precluding
Co., 649 F.3d 1276, 1291 (Fed Cir. 2011) (en banc). The Court therefore bifurcated that inquiry from
the second determination: Regeneron’s intent. The Court’s rationale was that the first topic would
be addressed by the experts and through documents, and the second (which involved testimony from
Drs. Smeland and Murphy) was only necessary if the Court determined the first issue in Merus’s
favor.
112
testimony treats the most recent issues as isolated and remediable – when they are
yet another step in a long pattern of litigation choices that have caused delay,
inefficient use of resources, and diversion from the merits.
The Court has carefully considered the appropriate combination of remedies
that best – and most narrowly – addresses where we find ourselves in this litigation
today. The Court includes in its analysis of appropriate remedy the history of
conduct that Regeneron has engaged in to this point.
Under these highly unusual circumstances, it is appropriate to preclude the
testimony of Smeland, Murphy and Jones. In recognition of the implications the
discovery conduct has on the entirety of the case, it is additionally appropriate for
the Court to impose the sanction of an adverse inference as to the intent of Smeland
and Murphy with regard to inequitable conduct during patent prosecution. See
Residential Funding Corp. v. DeGeorge Fin. Corp., 306 F.3d 99, 108-10 (2d Cir.
2002). The Court therefore infers that Drs. Smeland and Murphy together knew of
each of the Withheld References, knew they were material, and made a deliberate
decision to withhold them. In short, they acted with the specific intent to deceive
the patent office. The Court finds that this is “the single most reasonable inference
able to be drawn from the evidence”. Therasense, 649 F.3d at 1290 (quoting Star
Sci., Inc. v. R.J. Reynolds Tobacco Co., 537 F.3d 1357, 1366 (Fed. Cir. 2008)); see
also Residential Funding Corp. v. DeGeorge Fin. Corp., 306 F.3d 99, 108 (2d Cir.
2002) (discussing circumstances in which “[t]he sanction of an adverse inference
may be appropriate”). The Court therefore finds by clear and convincing evidence
113
that Drs. Smeland and Murphy knew of the Withheld References, knew of their
materiality, and made the deliberate decision to withhold them.
X.
CONCLUSION
For the reasons set forth above, the Court finds that Regeneron has engaged
in inequitable conduct in connection with prosecution of the ‘018 Patent.
The parties shall confer on a form of order of judgment and file either a joint
proposed order or competing proposed orders within fourteen (14) days.
The Clerk of Court is directed to terminate this action.
SO ORDERED.
Dated:
New York, New York
November 2, 2015
___________________________________
KATHERINE B. FORREST
United States District Judge
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