Appeals court rules for Jessup firm on biotech patent

Daily Record, The (Baltimore), Aug 24, 2006 by Cynthia Di Pasquale

A Jessup company won a patent dispute against Purdue University in a federal appeals court last week, permitting it to continue producing tissue-graft biotechnology used to treat this year's Preakness favorite, Barbaro, after the horse broke its ankle just out of the starting gate.

The U.S. Court of Appeals for the Federal Circuit found ACell Inc. did not infringe on a patent held by the Indiana university's research wing, Purdue Research Foundation, and licensed to Cook Biotech Inc. Although similar, their biotechnology product patents are distinct when interpreted more narrowly than a district court in Indiana did.

"The difference between ACell's technology and Purdue's is that in Purdue's patent, they scrape away and discard layers of [tissue] that we use as the basis of our technology," said Miles Grody, ACell's senior vice president of operations and general counsel. "That is what we've argued for three years and the Federal Circuit agreed with us."

ACell, which appealed after losing last year at trial, was forced to halt U.S. sales of its products while the appeal was pending, according to Grody. He estimates the company lost more than $10 million in profits due to the lost sales and its inability to partner with larger life science corporations in the three years the case was pending. However, it remained focused on its entry into the human market and plans to start clinical trials next month.

University spokeswoman Jeanne Norberg said Purdue "has not had time to review the ruling in detail, so we are not in a position to comment. Any decision about an appeal would be made by Cook."

An attorney for Cook Biotech did not respond to a request for comment.

Layers of meaning

ACell's sole product, ACell Vet, is sold in hydrated, freeze- dried and powdered forms to promote tissue healing when placed at the site of a wound. It does so by serving as a scaffold, known as an extracellular matrix or ECM, which attracts adult stem cells, which can regenerate site-specific tissues.

ECM technology was developed at Purdue University laboratories. The university patented technology using middle layers of urinary bladder tissue from warm-blooded animals.

Dr. Alan R. Speivack patented a slightly different ECM technology for ACell using the inner-most bladder tissue layers instead. (ACell Vet uses a tissue composition derived from the urinary bladder lining of pigs.)

Regardless, Purdue and Cook Biotech filed suit against ACell in 2003, claiming patent infringement. The judge in U.S. District Court in Lafayette, Ind., permitted jurors to construe the Purdue patent based on broad medical dictionary definitions of the tissues used, rather than the more limited definitions incorporated in its patent.

But that was incorrect, according to the appellate court.

Relying on Phillips v. AWH - an en banc opinion released by the Federal Circuit just two days after Purdue's district court verdict in June 2005 - the panel of appellate judges found the lower court should have considered the definition used in the patent and reversed the judgment.

"They said you must use the ordinary meaning of terms as would be understood by someone with skills in the art, and look at the patent itself and the claims and specifications in order to understand the meaning of those terms," Grody said about Phillips. "Any patent incorporated by reference must also be a part of that evidence."

Barbaro's good leg

Although ACell halted U.S. sales after last year's jury verdict, veterinarians still held a sizable inventory.

Some of that remaining product was used to treat Kentucky Derby racehorse winner Barbaro last month at a Philadelphia veterinary hospital, according to Grody.

Barbaro broke his ankle just after the start of the Preakness race in May and was recovering well after surgery until laminitis set in on his good leg. The condition in which the hoof separates from the bone developed because he was putting pressure on the good leg while the other recovered.

As of Tuesday - the last update available on the University of Pennsylvania School of Veterinary Medicine's Web site - Barbaro is "happy and comfortable" but still in intensive care.