Why did Acuitas bring a patent lawsuit against Arbutus?
Zachary Silbersher
The LNP patent battle lines are being drawn. In the past several weeks, Arbutus has sued Moderna, Alnylam has sued both Moderna and Pfizer, and in the latest, Acuitas Therapeutics has sued Arbutus and Genevant. What can we expect from the Acuitas lawsuit?
Acuitas has sued Arbutus and Genevant, but its lawsuit is not the same posture as the other suits. Whereas Arbutus has claimed that Moderna is infringing its patents, Acuitas is by contrast suing for a declaratory judgment. Acuitas is not claiming that any of its own patents are infringed by Arbutus. Rather, Acuitas is seeking a judgment that it is not infringing any of Arbutus’ patents.
A company brings a declaratory judgment lawsuit when it has reason to believe that the patent holder is about to sue for patent infringement. A declaratory judgment suit is a bit like saying, “Hey, Mr. Patent Holder sent me a letter threatening to sue me. But he hasn’t done it yet. But that threat is hanging over my business and bothering my customers. Accordingly, rather than waiting for Mr. Patent Holder to sue me, I’m going to bring a claim for declaratory judgment. I will argue that I’m not infringing Mr. Patent Holder’s patents, and I will seek a judgment saying that. Then the cloud of Mr. Patent Holder’s threat will no longer hang over my business.”
Acuitas seeks declaratory judgment relief with respect to nine patents owned by Arbutus. That includes the patents that Arbutus is asserting against Moderna, but others as well. Acuitas argues that it requires a declaratory judgment showing that Pfizer’s vaccine does not infringe because, otherwise, Arbutus’ threat to sue jeopardizes Acuitas’ ability to continue licensing its LNP technology.
Acuitas’ complaint against Arbutus reveals that there is a history between the two companies. In fact, as alleged in the complaint, the founders of the predecessor companies that eventually became Arbutus were also the founders of Acuitas. According to the complaint, those founders left Arbutus in 2008 and founded Acuitas. At that point, the two companies were heading in different directions. Arbutus was focused on developing LNP systems for small-interfering RNA drugs, whereas Acuitas was focused on developing LNP systems for mRNA drugs.
Acuitas’ complaint also suggests that developing LNP systems for mRNA drugs was vastly more complex than for siRNA drugs. Compared to siRNA drugs, mRNA is much larger, more foldable and less stable—all of which means the LNP delivery system for an mRNA therapeutic has been more challenging to engineer. In short, Acuitas is attempting to build a narrative that Arbutus is opportunistically attempting to claim proprietary rights over something that it never researched, developed or invented—namely, LNP technology specifically for mRNA therapies. By contrast, Acuitas itself claims to have patented the cationic lipid, namely, ALC-0315, which is used in Pfizer’s Covid vaccine.
Keep in mind, Acuita’s’ entire lawsuit at this point are just allegations — nothing has been proven — and Arbutus will have the opportunity to deny those allegations and prove otherwise.
How will Arbutus respond to Acuitas’ lawsuit? Its first defense is likely to be to file a motion to dismiss. To bring a claim for declaratory judgment, the plaintiff—which, in this case, is Acuitas—must allege that it had a reasonable belief that it was soon to be sued by the patent-holder. Typically, a DJ plaintiff will point to a letter from the patent holder saying something to the effect of, “You are infringing our patents, and if you don’t take cease and desist immediately, or enter licensing discussions immediately, we will bring suit.”
Here, Acuitas has not necessarily alleged that. Rather, Acuitas alleges that Arbutus and Genevant sent two letters to Pfizer stating they believe Pfizer’s vaccine is infringing some of Arbutus’ patents. But Acuitas is not Pfizer. And Pfizer has not joined Acuitas as a plaintiff in this suit. Acuitas’ allegations suggest that if anyone has standing to bring this suit, it would be the company that received Arbutus’ letters—namely, Pfizer, not Acuitas. It is notable that Pfizer did not join Acuitas’ suit because it technically could have.
Acuitas is likely to do a song and dance about how it is ultimately the real-party-in-interest in this dispute, since it is Acuitas’ technology, which has been licensed to Pfizer, that must be examined to determine if Pfizer’s vaccine is infringing Arbutus’ patents. Acuitas’ briefing on this point is therefore critical to assessing how strong its standing argument will be.
Even if Arbutus has designs of eventually pursuing an infringement lawsuit against Pfizer’s vaccine in the future, it may nevertheless have reasons to seek to dismiss Acuitas’ lawsuit at this time. First, when a company brings a declaratory judgment lawsuit, the company bringing the suit chooses the forum. Acuitas has sued in New York. Arbutus may prefer to bring the suit in Pennsylvania, where its U.S. headquarters are located.
Apart from that, Arbutus is currently suing Moderna for some of the same patents. Having a parallel lawsuit may create complications. Both suits will likely require a claim construction hearing where the scope of the patents is determined. Arbutus may wish to avoid the possibility of inconsistent claim construction rulings that will give Moderna a reason to avoid reaching a settlement or to argue the court’s construction was incorrect. In addition, if Acuitas’ lawsuit proceeds, Acuitas will likely seek to invalidate one or more of Arbutus’ patents. Arbutus may therefore have to face two separate invalidity challenges to its patents at once. On the other hand, however, that risk has been mitigated to some extent already—given that Arbutus has already prevailed on some of Moderna’s IPR challenges to at least two of its patents.
What about a settlement? Couldn’t Arbutus just license the patents to Acuitas, and thefore, avoid the hassle of a parallel lawsuit, while simultaneously mitigating the likelihood that Acuitas tries to invalidate Arbutus’ patents. In theory, yes. However, Arbutus will be very careful of not giving the patents away for a low royalty rate. If it were to license the patents for a song to Acuitas, then Moderna would seize upon that to argue that, even if it is found to infringe the patents, Arbutus should be compelled to license to Moderna for a song as well. (There is already evidence that Arbutus may have licensed some of its LNP patents in connection with Onpattro® for a low single-digit royalty.)
Given all of this, Arbutus may file a motion to dismiss shortly. The briefing on Arbutus’ likely motion to dismiss is therefore critical to assessing whether Acuitas’ lawsuit is likely to stand, or be short-circuited before it gets out of the gate.