Neptune Suffers Setback in Patent Reexamination Proceeding

WASHINGTONIn a reexamination proceeding, the U.S. Patent and Trademark Office has rejected a patent that previously was issued to Neptune Technologies & Bioressources, Inc., the biotechnology company based in Quebec, Canada.

USPTO "rejected all the claims of the '348 patent as unpatentable," Matts Johansen, chief operating officer of Aker BioMarine Antarctic AS, Neptune's competitor, said Tuesday in a statement.

The patent contains claims to phospholipid extracts from krill, according to Aker BioMarine.

In an "action closing prosecution," USPTO cautioned its decision could not be appealed because it was "not a final Office action."

The decision represented a temporary setback for Neptune, which supplies krill oil that is packaged into dietary supplements.

However, Neptune noted it will have a chance to submit additional arguments before the agency makes its final decision.

There are unresolved issues still outstanding, including new information filed by Aker that Neptune has not had the procedural opportunity to rebut," said Benoit Huart, director of legal affairs at Neptune, in a statement Wednesday.  We strongly believe that once this information is rebutted, the USPTO will be better placed to confirm our position."

Aker BioMarine, which is based in Oslo, Norway, had asked USPTO to reexamine the validity of the patent after it was issued to Neptune in October 2011.

Neptune has accused Aker BioMarine and others of infringing on its intellectual property, leading to contested proceedings at the USPTO, in federal court and at the U.S. International Trade Commission.

"We would urge Neptune to reconsider its current litigation strategy before all involved parties accrue substantial legal costs at no apparent benefit to Neptune," Johansen said.

The ITC has agreed to investigate allegations that Neptune's competitors have engaged in unfair trade practices, encroaching on its patents.

Neptune has asked the quasi-judicial federal agency to ban products from coming into the United States that allegedly infringe on its patents.

The reexamination decision does not affect the ITC proceeding or the patents involved.

A final resolution at the ITC is expected in the summer of 2014 based on the agency's target date for completing investigations. If the ITC rules in favor of Neptune, granting what's known as an "exclusion order", it will be immediately enforceable and remain in effect during the pendency of appeals, Henri Harland, the president and chief executive officer of Neptune, said.

"Neptune remains undeterred and confident in its legal strategy and will continue to aggressively defend its intellectual property," the company said in its statement.