Interference: A CRISPR Patent Dispute Roadmap

January 9, 2017

By Joe Stanganelli

January 9, 2017 | Emmanuelle Charpentier and Jennifer Doudna have become world renowned for their discoveries and development involving CRISPR/Cas9, a gene-editing technology that has been called "one of the most important genetic inventions of our time".

In 2014, the duo received the 2015 Breakthrough Prize in Life Sciences. The following year, Charpentier and Doudna were also co-awarded the €50,000 Princess of Asturias Award of Technical and Scientific Research—commonly referred to as the "Spanish Nobel Prize". The pair also garnered a nomination for the actual Nobel Prize in Chemistry.

Meanwhile, on April 15, 2014, another genetic researcher, Feng Zhang, was awarded something potentially much more valuable than the Nobel Prize: a patent by the United States Patent and Trademark Office (USPTO) for the very same thing for which Charpentier and Doudna have received so many accolades: using CRISPR/Cas9 to edit genes.

Well, more or less. While Charpentier and Doudna had demonstrated that CRISPR/Cas9 could be used to cut specific, targeted areas of DNA strands, Zhang took the next step by applying this mechanism to mammalian cells (i.e., mouse cells and human cells). Zhang's April 2014 patent (bearing a December 2012 priority date)—and several others related to it—followed.

But was Zhang's work novel? Or was his work merely the next "obvious" step to take, and/or fundamentally based on "prior art"? Moreover, what specific aspects of these "inventions" are the real focal points? Those are jurisprudential questions at the heart of a heated patent dispute that has been the talk of the biotech town for most of 2016—questions that are presently being decided right now by the USPTO.


Gene Knockouts Get Technical

On December 6, after nearly two years of legal filings and other lawyerly maneuvers, the USPTO held an initial round of oral arguments on this and related issues in an epic CRISPR litigation battle between a host of universities.

The squabble stems from the discoveries by Charpentier and Doudna's research teams, the subsequent actions of Zhang and his team, the legal wranglings of each, and the billions of dollars at stake for highly valued corporations and well-endowed research institutions to which they are tied.

Zhang's contested CRISPR/Cas9 patents are jointly owned by Harvard University, MIT, and the Broad Institute. On the other side of the legal equation are the institutions to whom Charpentier, Doudna, and their CRISPR co-inventors are tied—the University of Vienna and the Regents of the University of California. The latter are contesting Zhang's patent awards—and, as such, the monetary value and potential of those intellectual property rights belonging to Zhang's affiliated institutions—in a time-consuming, cost-consuming, modestly antiquated, and somewhat convoluted legal procedure known as a patent interference. The case has captured the attention—and trepidations—of the life-sciences industry and investors as it has unfolded. Moreover, an initial decision from USPTO judges on the case is not expected for at least another month or two.

If there is any universally good news to take away from the CRISPR patent saga, it is this: It is unlikely to happen again.

Patent interference proceedings such as this one have technically obsolesced in the US. Typically, a USPTO patent interference proceeding comes into being when different patent applications filed before the USPTO by different inventors may potentially overlap as the same invention. This is a relic of the "first-to-invent" days of US patent law. On March 16, 2013, however, the US turned into a "first-to-file" patent-law jurisdiction when certain provisions of the Leahy-Smith America Invents Act (AIA) went into effect—and henceforth banished patent interferences to a thing of the past.

And yet, patent interferences are still the law of the land for all patent applications filed before that key date.

CRISPR Patent1

So it was on March 15 in 2013—the very day before the AIA would have vanquished "first-to-invent" patent priority in the US—that a collection of inventors respectively affiliated with the University of Vienna and the University of California, Berkeley, (most notably including Charpentier and Doudna) filed US Provisional Patent Application No. 13/842,859 with the USPTO, claiming a priority date of May 25, 2012.


The '859 Patent Application Trio

This patent application, titled "Methods and compositions for RNA-directed target DNA modification and for RNA-directed modulation of transcription," was not the first patent application related to CRISPR-based gene editing to be filed with the USPTO, but—unlike its predecessors (a 2012 patent application by a research team from Vilnius University and a 2008 patent application by a research team from Northwestern University)—it is still under consideration and has not been rejected.

"The [respective] applications filed in 2012 by the Vilnius team and the Berkeley team each showed only that purified Cas9 protein and a certain purified RNA could cut a short piece of DNA in a solution in a test tube. In both cases, the applications in 2012 contained no cells, no genomes, and no editing," claimed the Broad Institute in a public statement on ongoing CRISPR-related patent litigation proceedings. "The USPTO rejected the Vilnius application as not having significantly more than a study of the natural system and failing to describe invention. The USPTO continues to consider the Berkeley application, which describes similar results in 2012 as the Vilnius application."

It is also this '859 patent application that lies at the center of everything in this patent controversy. A trinity made up of the Regents of the University of California, the University of Vienna, and Emmanuelle Charpentier herself banded together to file a request to initiate a patent interference. (Whereas her putative co-inventors—like Doudna—were obliged to assign their intellectual property rights to their respective universities, a quirk of Swedish law allowed Charpentier to retain her own intellectual property rights related to the '859 patent application.) Their request, called a "suggestion of interference," was filed on April 13, 2015—nearly one year after the USPTO's initial patent award to Zhang.

The basis of the trinity's claim?  That their '859 patent application supersedes the subsequent Zhang patents—and, as such, that they are entitled to all of the benefit derived from the latter. In January of this year, the USPTO's Patent Trial and Appeal Board allowed the patent interference process to proceed. 

Moreover, and more to the point, the '859 patent application claims the benefit of four other provisional patent applications before the USPTO—No. 61/652,086 (filed May 25, 2012), No. 61/716,256 (filed October 19, 2012), No. 61/757,640 filed (January 28, 2013), and No. 61/765,576 (filed February 15, 2013). Together, these five patent applications—along with an international patent application congruent to and filed the same day as the '859 US patent application—comprise the entirety of the patent rights of CRISPR Therapeutics AG, according to a Form S-1/A that the company filed with the US Securities and Exchange Commission (SEC) on October 7, 2016.


Following the Money: The Hunt for CRISPR Dollar Bills

To better understand and appreciate what's at stake in this patent litigation, there are a few things to know about CRISPR Therapeutics.

The first is that Emmanuelle Charpentier is one of the company's co-founders and sits on its scientific advisory board. As such, Charpentier has non-exclusively licensed her rights to her interests in the '859 patent application—and its affiliated patent applications—to CRISPR Therapeutics. Because these licenses form, more or less, the entire basis of the company's business model, a favorable USPTO ruling on behalf of the Broad in this patent interference case would be devastating for the company.

The same goes for Charpentier herself—and CRISPR Therapeutics is far from the only company with a directly vested interest in the outcome of these proceedings. According to a January 25, 2016, USPTO filing in her patent interference case, Charpentier has similarly licensed these patent application interests to two additional companies.

The first, ERS Genomics Ltd., was also co-founded by Charpentier and purports to hold an exclusive worldwide license to all of Charpentier's interests in the intellectual property rights covered by the '859 patent application for all applicable CRISPR/Cas9 uses other than those as a human therapeutic; to these ends, ERS apparently exists for the sole purpose of providing a vehicle to license Charpentier's CRISPR/Cas9 IP interests.

The second, TRACR Hematology Ltd., is a quietly formed British entity co-owned by CRISPR Therapeutics and Emmanuelle Charpentier individually—and, as such, is another of Charpentier's licensees in her '859 patent application interests. According to SEC filings, TRACR Hematology was apparently used as a vehicle to license Charpentier's CRISPR/Cas9-related human-therapeutic rights to both CRISPR Therapeutics itself and Vertex Pharmaceuticals.


Doudna, Where's My Cas?

Meanwhile, Charpentier's co-inventors Jennifer Doudna and Martin Jinek have their own business interests at stake—notably, their own CRISPR/Cas9-focused gene-editing firm, Caribou BioSciences. Doudna and Jinek, along with CRISPR researchers Rachel Haurwitz and James Berger, founded Caribou in 2011, according to a company spokesperson, "to develop and commercialize a number of CRISPR-based technologies for cellular engineering and analysis." (Also in 2011, the team founded Caribou Therapeutics Holdco, LLC, a wholly owned subsidiary of Caribou Biosciences.) 

CRISPR Patent2

It is known that all four Caribou founders are still closely associated with the company. Haurwitz remains as Caribou's President, CEO, and board member; her three co-founders sit on the company's scientific advisory board. (While agreeing to comment by email on a few of the company's licensing agreements, Caribou refused to discuss or confirm with Bio-IT World the company's present ownership interests.)

More to the point, Caribou Biosciences is the exclusive CRISPR licensee of both the University of Vienna and the Regents of the University of California. Should Charpentier and the universities' patent interference attempt fail, the business interests of Caribou—and those of its partners and its holding—are likely to be significantly impacted.

For starters, there is DuPont Pioneer, an international seed company that has been busily researching agricultural applications for CRISPR/Cas9—i.e., using the technology to genetically reengineer crops like corn and soybeans to be more resilient and resistant to stresses like drought. Dupont is also a known minority stakeholder in Caribou. Caribou has already licensed the rights related to numerous CRISPR-related patents and pending patent applications from DuPont Pioneer as part of a "strategic alliance" between the two companies. Some of these patent rights that Caribou has licensed, a Caribou spokesman related to Bio-IT World in an email interview, are intellectual property that was developed by Vilnius University—the same institution whose 2012 CRISPR patent application was rejected by the USPTO.

In November 2014, Caribou founded another then-subsidiary, Intellia Therapeutics.  Intellia is also focused on CRISPR/Cas9 technologies—and it is similarly heavily dependent upon the USPTO's determinations on the '859 patent application.

"Caribou has… licensed certain CRISPR-Cas9 gene editing IP to Intellia for human gene and cell therapy applications," noted a Caribou spokesman in an email interview. "Caribou co-founded Intellia in 2014 and continues to be a significant shareholder."

To be sure, Intellia raised dozens of millions of dollars in venture capital funding prior to 2016—luring such notable investors as Novartis, OrbiMed, Fidelity, and Blackrock. Intellia then went IPO this past May for a fundraising encore to the tune of $108 million—after the patent interference proceeding had begun but months before the controversy was significantly on the public radar. Intellia, however, has seen the value of its stock take a nose dive as the patent interference proceeded.

Ditto for Editas Medicine—the competing, similarly seminal CRISPR-based firm founded by Zhang et alia based on those challenged patents held by the Broad Institute, MIT, and Harvard. After Editas experienced a $43 million Series A round of financing about three years ago, a $120 million Series B round nearly a year and a half ago, and a $94.4 million IPO in February 2016, the biotech company suffered a fate similar to that of Intellia—taking a big hit to its stock price as CRISPR patent litigation proceeded and investor uncertainty grew.

Ironically, one optimistic and economically justifiable way of looking at this is that Editas and Intellia enjoyed wildly successful IPOs by being overvalued—and that investor reaction to the CRISPR patent interference proceedings was merely a market correction. Compare poor CRISPR Therapeutics; despite previously raising a not-too-shabby $140 million in private financing, the company's ill-timed IPO later in the year resulted in raising a comparatively paltry $56 million—a figure almost certainly depressed by the same litigation-fueled investor trepidation. (A CRISPR Therapeutics representative declined Bio-IT World's multiple requests for comment on this and other matters—even after the expiration of the company's SEC-imposed IPO "quiet period".)

Still, Editas—like its competitors—continues to bring in the bucks, despite the uncertainty of litigation.  Last December, and again this past August, for instance, Editas inked two major licensing deals respectively for its Cas9 technology (albeit for undisclosed amounts) with Massachusetts General Hospital.


Background Interference: Other Legal Proceedings

Moreover, for all of the hype of this major CRISPR/Cas9 patent suit, it is not the only one brought against the Broad Institute, Harvard, MIT, and Editas—and, thereby, not the only one to potentially impact the life-sciences market.

On exactly the same day that the University of Vienna, the Regents of the University of California, and Emmanuelle Charpentier filed their suggestion of interference against the Broad, Harvard, and MIT, so too did ToolGen—a Korean genome-editing company—file its own suggestions of interference against that latter group, relating to five of the Broad/Harvard/MIT CRISPR patents Charpentier and company also contest.

ToolGen filed its own CRISPR/Cas9-related patent application with the USPTO in October 2012—which the USPTO subsequently rejected for failing to describe an actual invention. Accordingly, the company's own entry into the CRISPR/Cas9 litigation foray may be its attempt at a second bite at the patent apple—and, as such, may have untold consequences on both sides of the currently ongoing patent interference.  (Indeed, ToolGen recently announced a major licensing deal on its entire CRISPR/Cas9 IP portfolio with Thermo Fisher Scientific—a particularly important deal as the latter firm has been working to make strides in CRISPR activation (CRISPRa) and CRISPR interference (CRISPRi).)

CRISPR Patent3

Meanwhile, a separate institution, Rockefeller University, quietly (even secretly) filed a patent application on July 7, 2014, claiming a CRISPR/Cas9 invention. The twist is that this patent application is apparently 100% duplicative of Zhang's initial CRISPR patent—with two glaring exceptions: the addition of Luciano Marraffini as an inventor, and the addition of Rockefeller University—Marraffini's institution—as an applicant. The filing is particularly controversial because the application was reportedly filed without notice to any of the other parties listed on the application—and, as such, without their consent to the patent application itself or to representation by Rockefeller University's legal team.

This claim to additional inventorship notwithstanding, Marraffini's involvement with Zhang's CRISPR patent may influence the outcome of the current patent interference proceeding involving the Charpentier trinity. In a list of proposed motions filed on March 3, 2016 (Note: in USPTO proceedings, motions must generally be proposed, explained, and approved before they can be actually filed in earnest), attorneys for Charpentier, the University of Vienna, and the Regents of the University of California pointed out that Marraffini was included as a co-inventor on the Broad's first two provisional patent applications related to CRISPR/Cas9 technology, and that Marraffini was listed as a co-author on Zhang's concurrently published CRISPR/Cas9 paper in Science—but, along with other, similarly listed individuals, was left off of the Broad Institute's actual patents that claim benefits to these two provisional patent applications. They go on to argue that, as per US patent law, "it appears that each of Broad’s involved patents fails to provide proper inventorship and, therefore, the claims of each of Broad’s involved patents are unpatentable."

Finally, there is the rest of the world—outside the United States—to think about.  In Europe, for example, nine parties have objected to a congruent CRISPR/Cas9-based European patent awarded to the Broad Institute. Meanwhile, Doudna's patent application before the European Patent Office remains pending. With these facts in mind, there are yet several more years potentially before there is clarity on CRISPR/Cas9 ownership overseas.


The Distraction of CRISPR/Cas9 Litigation

While some industry watchers have criticized the CRISPR/Cas9 patent litigation as something that fundamentally "gets science wrong" while potentially "serving little purpose," others have noted that it is merely a temporary distraction from the real issue of clinical application because of how long it takes to bring therapies to market. One executive for a large American biotech firm that licenses CRISPR/Cas9 technology, speaking anonymously, told Bio-IT World in an interview that, in the end, the result of the litigation won't matter for licensees—despite the widespread fear and uncertainty present in the life-sciences marketplace (impacting stock prices and valuations of companies in the CRISPR space)—because the competing, litigating licensors will eventually work out amongst themselves who gets what money based upon the final result (with, doubtlessly, the help of additional lawyers to draw up the contracts). Counter, therefore, to what some pundits have opined, the CRISPR/Cas9 battle is unlikely to be a zero-sum proposition.

Meanwhile, many licensees are covering themselves six ways from Sunday, entering into licensing arrangements for CRISPR/Cas9 technology with multiple, competing CRISPR/Cas9 companies—a prophylactic measure designed to remove all doubt as to what they are allowed to do from a patent-law perspective.  Moreover, the extensive scientific collaboration required to help bring therapeutic products to market naturally makes life-sciences industry incest inherent. In January 2015, for instance, AstraZeneca announced multiple partnerships as part of a far-reaching CRISPR-based collaboration. The pharmaceutical company's simultaneously publicized partnerships include both the Broad Institute and Thermo Fisher Scientific; Thermo Fisher Scientific, meanwhile, licenses CRISPR technology from ToolGen—one of the Broad's ongoing foes before the USPTO.

In the end, this may all mean nothing. Zhang's Editas has been notably expanding its CRISPR portfolio beyond what lies at stake in its quarrels with Charpentier and company. In September 2015, Zhang and other researchers published a paper in Cell announcing that Cpf1, a single-guided RNA endonuclease associated with CRISPR (compared to the Cas9, which requires two RNA strands to guide it), could be used more efficaciously and more easily than Cas9 to perform the same gene-editing functions. An additional benefit of Cpf1 over Cas9-based technology is that Cpf1 creates "sticky" strand ends that will hold the DNA together better than Cas9 does—potentially eliminating the need for oligonucleotides to perform that task on the "blunt," "frayed" ends created by Cas9-based editing. Accordingly, the Editas-original discovery of these Cpf1 benefits could potentially make the CRISPR/Cas9 litigation a financial moot point.

Therefore, perhaps the popular patent punditry is wrong, and that the risks and costs of the patent battle (Editas has had to shell out close to $16 million so far on the Broad Institute's legal costs in these patent interference proceedings, while the University of California, Berkeley, has reportedly spent more than $5 million) may in fact be contributing to "get science right"—by compelling competition for better technology.

The point is a debatable one on either side, but either way, the science (and business) of gene editing is still alive—with, or without, the lawyers.


Joe Stanganelli is a Boston-based attorney, consultant, speaker, and writer.