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When Dolly the sheep made her public debut in 1997 as the world’s first cloned animal, scientists at the University of Massachusetts and DeForest, Wis.-based Infigen Inc. didn’t see much that was new. After all, each group was independently racing to develop cloning techniques to rival those of Dolly’s Scottish creators. Soon, both would unveil their own laboratory-made animals — Gene the bull, followed by a bovine pair named George and Charlie. Now, the three sets of cloning pioneers are embroiled in a high-stakes dispute before the U.S. Patent and Trademark Office to determine who came up with a key cloning technique first and deserves to hold the patent. Known as an interference, the proceeding takes place in secret — the PTO won’t even announce when an interference has been declared — and tends to be highly arcane, even by the standards of intellectual property law. Companies fight tooth and nail for the ownership of patents potentially worth millions of dollars. The central question in each interference is the same: Who was the first to conceive of a new invention? With lab books and research papers and witnesses, companies vie to convince a trio of patent law judges that they alone were the original inventors and should win the patent. In the rest of the industrialized world, it’s a moot point — patents go to whoever files a valid application first, a simple system that groups like the Intellectual Property Owners Association would like to see adopted here. But U.S. law dictates that the inventor — not the entity that gets to the patent office first — has the ultimate right to the patent, setting the stage for some outsized IP showdowns. “Whenever there’s a lot of money at stake, there’s always someone else claiming to have invented it first,” says interference specialist Richard Neifeld of Arlington, Va.-based Neifeld IP Law. Alexander Graham Bell, for example, won his patent for the telephone in an interference. Through the years, inventors have duked it out for the rights to products such as barbed wire, the ubiquitous plastic material polypropylene, and the hepatitis B vaccine. Recent cases include a challenge to part of Microsoft Corp.’s operating system and a fight over basic optical technology. “There’s a mystique associated with interferences,” says Bruce Stoner Jr., chief administrative patent judge at the PTO, where 17 of the agency’s 64 patent law judges specialize in interferences, declaring just over 200 each year. “Very clearly, these are cases that people consider to be economically important.” NO BULL The current cloning dispute stands out as one of the more significant and openly acknowledged fights, which usually occur entirely away from the public eye. On one side is Dolly, who was cloned by scientists at the Roslin Institute in Scotland. The case is being litigated by the Geron Corp. of Menlo Park., Calif., which acquired Roslin Bio-Med in 1999 and picked up cloning-related IP rights as part of the purchase. No one disputes that Dolly, who was born on July 5, 1996, is the world’s first cloned animal. But the patent isn’t on the actual animal — it’s for the process used to create the animal. Although Geron holds several cloning-related patents, the company does not own the rights to a basic technique involving the transfer of a nucleus from a donor cell into an egg — technology that Geron says “underl[ies] the pioneering work that led to the cloning of Dolly.” Nor does the patent belong to Wisconsin-based Infigen, which produced Gene the bull in February of 1997 using a somewhat similar cloning technique. Instead, in 1999, patent No. 5,945,577 was assigned to the University of Massachusetts, where scientists created cow clones George and Charlie the previous year. The university has licensed the patent to Advanced Cell Technology Inc., or ACT, of Worcester, Mass. Both Geron and Infigen asked the PTO to declare an interference with the goal of capturing some or all of ACT’s patent. Also at issue are at least two of ACT’s pending patent applications. Geron has also asked for additional interferences involving other ACT patents. Geron is represented by Kenneth Meyers of Washington, D.C.’s Finnegan, Henderson, Farabow, Garrett & Dunner, and Infigen has turned to Richard Warburg of the San Diego office of Milwaukee’s Foley & Lardner. ACT has retained Robin Teskin, a partner in the Northern Virginia office of Pillsbury Winthrop. The PTO granted both interference requests earlier this year, then, to cover all bases, declared a third interference between Geron and Infigen on March 11. Lawyers say they still don’t know whether the proceedings will be consolidated. The value of the patent remains unclear. A potentially lucrative use for cloning is in agriculture, and the Food and Drug Administration is contemplating whether to approve cloned animal products for human consumption. Cloning super-productive milk cows could be an especially promising market. Last year, an unborn clone of a Holstein grand champion sold at an auction for $100,000. Stephen Sundlof, director of the FDA’s Center for Veterinary Medicine, says the agency has asked the National Academy of Science to issue a report, expected in June, on any potential problems with cloned products. Depending on the recommendation, the FDA could decide to treat cloned animal products like drugs, subject to the agency’s rigorous pre-market approval process, or conclude no regulation is necessary at all. “If the milk is materially identical to normal cow’s milk, it’s possible we would not require mandatory labeling” to inform consumers of its origin, says Sundlof. Such a finding would be a boon to whoever wins the patent fight and likely spur demand for cloned cows. Currently, ACT subsidiary Cyagra Inc. charges $20,000 to clone a cow, provided the buyer supplies the genetic material. PET SMARTS The cloning of pets is another commercial application of the technology. Lou Hawthorne is CEO of College Station, Texas-based Genetic Savings & Clone, which pays ACT a licensing fee for use of the patent and plans to start selling pet cat clones later this year. Hawthorne predicts that the pet cloning market will be huge, but says the technology now being fought over is “transitional. There’s better stuff coming down the pike.” But Infigen lawyer Warburg says the case isn’t just about today’s market — it’s also about which company will be best positioned in the future. “It’s always good to have patents that could potentially block other people from practicing in an area,” Warburg says. “It allows you to prevent certain competition.” Warburg says a key question in the case will be, “When have you actually conceived of an invention? When the animal is born? When you have an embryo that could develop into an animal?” He adds, “Basically, the fight here is who was the first to invent, and what were they first to invent?” Both Geron and Infigen assert that their scientists came up with cloning techniques first, but they aren’t necessarily talking about identical methods. Indeed, much of an interference is spent determining just what is — and isn’t — covered by the patent, and where the competing applications overlap, a process known as the count. Geron asserts its intellectual property rights are broad. “Clearly, we were the pioneering scientists,” says David Earp, vice president of intellectual property for Geron, who says the company expects the proceedings to “make the full scope of our nuclear transfer patent rights clear.” ACT responds in a statement that “the subject matter of the interference is limited to the use of a proliferating, somatic cell to produce a cloned cow, sheep or pig.” Company president Michael West declines further comment. One possible outcome is that the parties will wind up splitting the intellectual property rights based on how the cells are treated during the cloning process. According to Judge Stoner, most interferences settle after 10 or 11 months, when the administrative patent judge starts issuing decisions on crucial preliminary motions and the parties get a read on the direction of the case. If the cloning case goes to trial, the statistics favor Geron. Based on the filing date of its initial patent application, Geron has been designated senior party in both its interferences. That means the other companies bear the burden of proof to show their scientists were actually first to invent. On average, says Stoner, the senior party wins 75 percent of the time. While that number suggests a “huge procedural advantage,” says interference specialist Jerry Voight, a partner at Finnegan Henderson, “I don’t think that’s necessarily true. Usually, the senior party wins because there’s a good correlation between who files first and who invented first.” What remains unclear in the cloning case, though, is how ACT wound up with the original patent. ACT’s answer is simple: “We [were] the first party to clone a non-human animal” using a particular technique. But Earp from Geron disagrees. He speculates that the competing patent applications were all pending before the PTO at the same time. For an examiner, he says, “it’s not easy to look at every other patent application.” Further, Earp continues, the actual process of obtaining a patent “is an art form,” with the scope of the patent frequently in flux. “The patent office probably looked at the claims we had pending at the time, and our claims then may not have been sufficiently close to ACT’s to warrant an interference,” he says. But once Geron saw ACT’s final patent, the company concluded there was a conflict and asked the PTO for an interference. INTERFERENCE PENALTY Interferences are granted at the discretion of an administrative patent judge working with a specially trained patent examiner. For the handful of interferences that go to trial, virtually all are concluded within two years. That’s a big change since 1998, when interferences were legendary for being “expensive, unpredictable, lengthy proceedings that flat-out cost too much,” Judge Stoner says. The hepatitis B vaccine case, for example, which pitted Genentech against the University of California at San Francisco, took 20 years to resolve from the time of invention to the final decision from the U.S. Court of Appeals for the Federal Circuit, which reviews PTO interference decisions. Another case that has taken nearly as long involves a Monsanto patent application covering the basic technology used in bioengineering plants, as chronicled by Daniel Charles in his new book, “Lords of the Harvest.” In October 1998, Stoner created the “trial section” — a group of patent law judges who would handle the declaration and administration of new interferences. Others were assigned to concentrate on deciding the backlog of old cases. As of February, there were 188 interferences pending more than five years, down from 433 in the fall of 1998. Stoner’s biggest procedural reform: setting non-negotiable deadlines at the outset for wrapping up the preliminary motion phase. “We needed a culture change,” Stoner says. “We’ve tried to model a lot of what we’ve done on the way things are done in the [federal courts in the] Eastern District of Virginia.” The reforms have been popular with the group of 100 or so lawyers who handle interferences regularly. “I was a little skeptical when it first came out, but it’s worked extremely well,” says Finnegan Henderson’s Voight. “They keep your feet to the fire.” Earp of Geron is optimistic that the cloning case won’t drag on for years. “Hopefully, there will be a quick resolution,” he says. Still, he notes that Geron has 17 cloning patents granted in other countries, without any sticky, unresolved questions over origination. “In the rest of the world,” he says, “patents just go to the first to file.”

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