UC loses the CRISPR-Cas9 patent appeal—now what?

Zachary Silbersher

The CRISP-Cas9 saga has effectively come to an end.  For now.  On September 10, the Federal Circuit affirmed the decision of the PTAB dismissing the interference between UC and Broad.  What are the implications for UC’s patents? What are the chances UC can successfully appeal to the Supreme Court?

We previously blogged about the case here and here at length.  The bitter dispute between UC and Broad essentially boiled down to who owns the fundamental patents covering use of CRISPR-Cas9 within eukaryotes.  That includes plant and animal cells, which is where all the groundbreaking commercial potential for this invention exists.   

The Federal Circuit found that UC was the first to explain “the CRISPR-Cas9 system and its use in vitro using isolated components.”  The Federal Circuit conceded that, “[t]here is no dispute that this represented a breakthrough in the art.”  Despite that, the Court held that the Patent Office did not err in finding that, after weighing all the evidence, there was no reasonable expectation of success within the scientific community that using UC’s CRISPR-Cas9 system in eukaryotes would be successful.  Given that Broad was the first to do that successfully, Broad gets to keep its patent covering CRISPR-Cas9 system in eukaryotes.

Because Broad has prevailed over UC, and because the legal dispute only concerned Broad’s patent, that means that nothing effectively changes.  Broad gets to keep its patent covering use of CRISPR-Cas9 in eukaryotes, whereas UC also gets to keep its patents covering CRISPR-Cas9. 

Since UC can keep its patents, that means UC can theoretically license them and cash in.  Nevertheless, UC’s patents have been significantly weakened by this dispute.  At the end of the Federal Circuit’s opinion, the Court stated: “We note that this case is about the scope of two sets of applied-for claims, and whether those claims are patentably distinct. It is not a ruling on the validity of either set of claims.”  In other words, the Court is cautioning any doubters that it has not invalidated UC’s CRISPR-Cas9 patents by virtue of this decision. 

But, in reality, the Court’s decision eviscerates much their value.  Anyone interested in licensing CRISPR-Cas9 patents—either a startup, a University, or whomever—will presumably want to use CRISPR-Cas9 in eukaryotes.  That is what this new technology is all about.  Yet, the brunt of the Federal Circuit’s decision is that UC’s patents do not actually cover the use of CRISPR-Cas9 in eukaryotes.  In other words, UC did not invent that. 

Thus, if push-came-shove, and UC were forced to enforce one of its patents through litigation, it would have to argue that use of its patents in the eukaryotes is infringing.  But UC just argued that in the interference, and the Court held that UC’s patents did not adequately describe that—because there was no reasonable expectation that using UC’s patents alone within the eukaryotic environment would be successful.  That’s another way of saying—in patent legalese—that UC’s patent’s suffer from a lack adequate written description or are not enabled.  And that means that the patents are potentially invalid. 

What all that means is that UC’s interference loss against Broad will cast a shadow over any attempt by UC to bill its patents as fundamental and must-have within this space.  Rather, ironically, those billing rights now belong to Broad.  Regrettably for UC, this decision has fortified the value of Broad’s patent.  UC gambled and lost, because had it left this fight alone, it could have held its patents out as just as valuable as Broads’ IP.  Anyone wanting to license the fundamental IP in this space would be wise to take a license to the first patent claiming use of CRISPR-Cas9 within eukaryotes, and that is now Broad. 

All that said, most wise licensees—who presumably have wise and concerned investors behind them—will want to cover all their bases.  The smart play will be to license as much of the fundamental IP as possible.  UC and Broad would be smart to pool their IP together, and license it as a package.  Indeed, this entire interference fight may have been a prelude to just that—with the victor of the fight reaping the better terms of the split.  It bears remembering that there are other players within this space, and a patent pool with IP from multiple players is likely to congeal soon, now that the UC/Broad fight may be cooling down.  Indeed, at least one patent pool for CRISPR-Cas9 organized by MPEG-LA has already formed.

That being said, before we speculate whether UC and Broad will tie their patents together, we must wait to see if UC will throw in the towel.  UC’s options are limited, but it still has a few.  It can appeal for a rehearing to the Federal Circuit, and it can also request an en banc ruling.  In the latter case, UC will essentially be saying that this appeal raises such an important issue that it demands the entire Federal Circuit weigh in.  Both a request for rehearing and a petition for en banc review are hail mary’s.  UC can also appeal to the Supreme Court, which would also be a hail mary. 

The problem is that, although this legal battle attracted much public interest, and the science at stake is truly groundbreaking, the legal issue on appeal was fairly straightforward—was the Patent Office’s decision supported by substantial evidence?  We can disagree with the outcome, but this case does not, at first blush, raise any important legal issues over which courts are splitting.  Indeed, the Federal Circuit’s decision had no dissent, which is typically a sign that higher review is warranted.  Either way, given how far UC has come, it is likely to try its hand at en banc review or the Supreme Court, which is likely to drag this out another year. 

All that said, cases like this can be unsettling.  I do not think that the Patent Office or the Federal Circuit improperly applied the law.  The Patent Office weighed the evidence, over which reasonable minds could differ, and the Federal Circuit found that the Patent Office’s decision was supported by substantial evidence.  That said, it’s not clear to me the right result was reached.

Shortly after the oral argument in April, I wrote:

“[W]hat remains unsettling about this case is that, even if the consensus was that implementing CRISPR-Cas9 in eukaryotes was unpredictable, that does not change the fact that what Broad actually did was itself obvious.  Broad’s success didn’t require innovation.  Indeed, Broad did what everybody else did.  And it is unclear why the team that took the obvious route, the route that was apparent to everyone else, will gain the spoils of this revolutionary invention . . . UC mapped out the system, but acknowledged that it may not necessarily work in eukaryotes.  But when Broad actually tried, it used obvious techniques to do so.  And yet despite UC’s discovery, the spoils of this discovery will go to Broad.  For doing something that was obvious to everyone else.”

Having now read the decision by the Federal Circuit, what was unsettling about this case before still remains.  If UC has any chance of succeeding at the Supreme Court, then it will have to tap into that unsettling concern about this decision:  how come the team that followed someone else’s map, and did what was obvious to lots of other people, nevertheless ends up with the spoils of this groundbreaking invention?  People don’t remember Elisha Gray.  They only remember Alexander Graham Bell.