Moderna $MRNA v Arbutus $ABUS CAFC Appeals Hearing October 2021
On October 7, 2021 the The United States Court of Appeals for the Federal Circuit (CAFC) heard the Moderna $MRNA v Arbutus $ABUS cases. The appeals stem from Inter Partes Reviews (IPR) at the USPTO Patent Trial and Appeal Board (PTAB). Moderna filed Inter Partes Reviews on Arbutus patents 8,058,069 and 9,364,435. An excellent writeup of the background was written by Perry Cooper and Susan Decker at Bloomberg.
PTAB Final Decisions:
Patent 8,058,069 - No claims found unpatentable.
Patent 9,364,435 - Claims 1–6, 9, 12, 14, and 15 were found unpatentable. Claims 7, 8, 10, 11, 13 and 16–20 were not found unpatentable.
Dan Ravicher, Gaston Kroub, and myself held a Twitter Spaces that broadcasted both appeal hearings and immediately afterwards we held a discussion. A replay can be found on YouTube. It was really great to hear opinions from patent attorneys in real time right after the hearing concluded.
The key issues are standing and the merits invalidating the patents, specifically anticipation and obviousness. Arbutus argued that Moderna didn’t have standing to bring appeals of the IPR Final Decisions. Arbutus argued the Final Decision on the ‘069 patent should stand and the unpatentable claim findings on the ‘435 patent were wrong and should be remanded back to the PTAB. Moderna cross appealed and argued the opposite. The majority of the hearings time was spent arguing the standing issues and I thought Dan and Gaston did an excellent job explaining the positions in detail. The case the parties frequently cited was argued by Dan so he is very familiar with the standing issues.
So what can happen from here? The CAFC panel (Lourie, O'Malley, & Stoll) can issue Rule 36 decisions rubber stamping the PTAB’s findings without writing opinions, which is usually published within 15 business days from the hearing. The panel can write precedential or non-precedential opinions affirming, reversing, remanding, or a combination of all three, which can take anywhere from two to eight months.
Opinions at the CAFC are usually issued between 9:15am through 10:30am EST. Perry Cooper live tweets the decisions as they roll in every single morning. The opinions are published on the CAFC website at 11:00am EST. There is also a sophisticated unknown party(s) that gets the decisions lightning fast and will move the stocks. Watch the share and option volume spike with a stock move +/- 5% and you will usually know the decision is out and who won or lost.
I believe Arbutus is waiting on the results from the appeals before they decide to file any patent litigation lawsuit against Moderna related to their COVID19 vaccines. A win at the PTAB would put them in a very good position to prevail on the validity side and will likely use estoppel to block invalidity arguments. Arbutus was also issued patent 11,141,378 on October 12, 2021, which is a child parent of the ‘069 and ‘435 patent.
My opinion on the outcome from the appeals: ‘069 patent will be affirmed = Arbutus win. ‘435 patent non-precedential affirming the PTAB on the merits with an opinion on standing that doesn’t change the outcome. There is an outside shot the ‘435 appeal will just be rubber stamped Rule 36 affirmed.
Disclosure - I have no position in $ABUS or $MRNA stock or options at this time. I am not a patent attorney.