MODERNATX, INC. v. ARBUTUS BIOPHARMA CORPORATION

Before Lourie, O’Malley, and Stoll. Appeal from the Patent Trial and Appeal Board.

Summary: Sublicensee’s theory of royalty-based injury was too speculative to support standing on appeal. Later changes in factual basis cannot support standing where the original basis for standing is not shown to be continuous.

Moderna filed a petition for inter partes review challenging certain claims of Arbutus’ patent related to methods of making and administering stable nucleic acid-lipid particles. The Board found that, while certain claims were anticipated, Moderna had failed to prove that the remaining claims were either anticipated or obvious. Moderna appealed the remaining claims.

On appeal, Moderna initially stated that it did not base its standing on a risk of a future infringement suit. Rather, it based its standing on its status as a sublicensee of Arbutus’ patent with “actual monetary obligations . . . that are impacted by the Board’s validity determinations.” However, over a year later, Moderna filed a motion to supplement the record to provide evidence that it had (1) terminated the programs that involved Arbutus’ patent, and (2) begun development of a COVID-19 vaccine which had in turn created a significant risk of a future infringement suit.

Rather than examine the merits of the Board’s decision, the Federal Circuit dismissed Moderna’s appeal due to a lack of standing. The Federal Circuit first explained that Moderna’s initial theory of financial injury was too speculative. In particular, Moderna hadn’t made a royalty or milestone payment in 5 years and failed to identify any expected future payments. Additionally, Arbutus’ patent was only one of many licensed patents involved in Moderna’s sublicense. Moderna failed to provide any evidence as to how, if at all, its sublicense would be affected by the invalidation of only the Arbutus patent at issue, but not the other licensed patents.

Finally, the Federal Circuit rejected Moderna’s supplemental standing argument. The Federal Circuit explained that, even if Moderna had established standing at the time it filed its appeal, Moderna failed to show that its termination of the sublicense programs occurred after its COVID-19 vaccine development had created a substantial risk of a future infringement suit. Thus, an “intervening abandonment of the controversy produces loss of jurisdiction.”

Editor: Paul Stewart

Written by: James Yang & Hans L. Mayer