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ABI, Roche Settle Patent-Infringement Suit Against Bio-Rad; MJ to Resume Selling Thermal Cyclers

Applera and Roche Molecular Systems have settled a long-standing patent-infringement suit against Bio-Rad Laboratories unit MJ Research, enabling MJ to resume selling its thermal cycler products in the US.

According to Bio-Rad Treasurer Ron Hutton, MJ will resume selling the thermal cycler products immediately. In addition to settling the issue in the US, Bio-Rad also agreed to license certain Applera and Roche RT-PCR patents in Europe and Japan, even though patent offices for those jurisdictions had invalidated Applera's RT-PCR patents.

As part of the settlement, Applera licensed certain Bio-Rad technology related to capillary electrophoresis. Applera and Bio-Rad officials declined to provide details related to that license.

"We all wanted to put this matter behind us," Hutton said, explaining why Bio-Rad took the licenses for Europe and Japan. He said the firm wanted to make sure it was protected against further litigation, "rather than having some things that were out there [that] were still in question. I think there [are] still some appeals going on over there, [and] this puts the whole thing behind us."

Hutton said that terms of the settlement, which ends an eight-year dispute between MJ and Applera, are currently not being disclosed. However, he said the firm may have to disclose some more information about the settlement due to US Securities and Exchange Commission regulations.

"We all wanted to put this matter behind us … I think there [are] still some appeals going on over there, [and] this puts the whole thing behind us."

A History of Defeats for Bio-Rad

Applera and Roche filed a patent-infringement suit in November 2004 in the US Court for the District of Connecticut against Bio-Rad, MJ, and rival Stratagene, seeking a permanent injunction that would prevent those firms from selling their thermal cycler products (see BioCommerce Week 11/18/2004). The suit was filed just hours after the company had received US Patent No. 6,814,934, entitled, "Instrument for monitoring nucleic acid amplification."

Applera alleged that MJ Research's Opticon, Opticon 2, and Chromo 4 systems; Bio-Rad's iCycler iQ and MyiQ instruments; and Stratagene's Mx4000 and Mx3000P instruments infringed its '934 patent.

The dispute with MJ preceded the suit filed against Bio-Rad and Stratagene. In April 2004, the New Haven-based court had found that MJ had infringed Applera's and Roche's patents, and a jury ordered the firm to pay $19.8 million in damages. The court increased that amount by $15.6 million in April 2005, citing willful infringement (see BioCommerce Week 4/7/2005).

Bio-Rad acquired MJ, which had declared bankruptcy in March 2004, in August of that year for $32 million in cash "and the assumption of certain liabilities of those companies, including liabilities related to certain patent-infringement litigation to which MJ Research is a party, plus a cash earn-out based on the outcome of such litigation," according to a company statement released at the time. Bio-Rad also set aside $50 million in a contingency fund for the suit.

A strange twist in the case came in early September 2005 when Bio-Rad claimed the firms had reached a settlement, while on the same day ABI declared that the US Court had granted the injunction preventing MJ and Bio-Rad from making or selling thermal cycler products that infringed ABI's patents (see BioCommerce Week 9/8/2005). The court upheld the injunction in late November, and Bio-Rad got its wish to return to settlement talks with Applera in December (see BioCommerce Week 12/22/2005).

Bio-Rad is not disclosing how much revenue it lost since the injunction was ordered. Hutton told BioCommerce Week that he expects that question to come up during the company's fourth-quarter conference call next week. "We are trying to figure out exactly how to address that. I'm sure we'll have an answer" at the time of the conference call, he said.

There is no question, however, that the injunction hit Bio-Rad's top and bottom line in the fourth quarter. During the firm's third-quarter conference call last November, CFO Christine Tsingos said, "If the injunction remains in place through the remainder of the fourth quarter, our life science business could be negatively impacted with sales being reduced as much as $10 million to $15 million and pre-tax operating profits reduced as much as $8 million to $10 million versus our prior expectations." (see BioCommerce Week 11/10/2005)

Stratagene remains a defendant in the lawsuit filed by Applera and Roche, though an injunction has never been granted against Stratagene in the case and the firm continues to sell its thermal cycler products. Applera and Stratagene officials both declined to discuss the ongoing litigation between the firms.

— Edward Winnick ([email protected])

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