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After Settling with Applera, Genetic Technologies Considers Suing Other Potential Patent Infringers

Following nearly three years of litigation, Applied Biosystems parent Applera has settled a patent dispute with Australian firm Genetic Technologies, allowing ABI to continue selling certain products containing non-coding DNA technology that is covered by Genetic Technologies' patents.

Neither company would disclose the financial terms of the settlement, which ends a dispute dating back to March 2003, but Genetic Technologies said that as part of the agreement Applera has licensed its patents. The settlement will allow ABI and sister company Celera to continue selling a variety of products incorporating non-coding DNA.

Among the products sold by the two Applera units that allegedly infringed two Genetic Technologies patents were cystic fibrosis reagent kits, TaqMan genotyping and gene-expression assays and assay services for non-coding regions, AmpFLSTR kits, the SNPlex genotyping system, the SNPbrowser tool, the Celera Discovery System, and Celera's haplotype analysis business.

ABI officials did not respond to BioCommerce Week's request for comment by press time.

While ABI and Celera are now in the clear, other research-tool and genetic-testing providers can expect to hear from Genetic Technologies, which has been emboldened by Applera's decision to settle rather than see the case play out in court.

The case was being closely watched by these types of firms, and undoubtedly some will be unhappy that ABI chose to settle. One patent attorney that has written previously about the non-coding DNA patents told BioCommerce Week that, despite a Markman ruling that appeared to favor Genetic Technologies, she does not believe the patents would have stood up under challenge.

"We've identified 400 companies that are commercially significant, out of a database that contains 2,000 names" of potential infringers … "It's just a question of corresponding with them and making them aware of the patents and how we believe they require a license for those patents for their activities."

"We've identified 400 companies that are commercially significant, out of a database that contains 2,000 names" of potential infringers, Geoff Newing, general manager of business development for Genetic Technologies, told BioCommerce Week. He declined to name any of these companies.

"We've been aware of which activities potentially require a license … be it through the web, or through public statements," he added. "It's just a question of corresponding with them and making them aware of the patents and how we believe they require a license for those patents for their activities."

In an interview this week with a web-based news service, Australian Biotechnology News, Genetic Technologies CEO Mervyn Jacobson was even more direct. "Lots of people have hidden behind Applera, believed that time was on their side, if Applera could continue to obstruct us, and invalidate our patents," he was quoted as saying. "I am now setting my sights on hundreds of targets who, in our view, already owe substantial amounts for past activities, and will owe us more for future activities."

Newing said that, including Applera, Genetic Technologies has licensed the so-called junk DNA patents to 30 companies. The amount of the license fee depends on the company and for what ends they require a license, he said.

"Excluding Applera, our average license fee … is around [AUS]$1.125 million (US$850,000). You have to understand that's at the very start of their licensing program." The first license the company signed, when it began the licensing program three years ago, was for AUS$75,000, Newing added.

Among the several firms that have signed licensing deals for the patents over the past three years are Myriad Genetics, LabCorp, Nanogen, Sequenom, and Perlegen. Genzyme Genetics, which signed a license for the patents in September 2004, paid Genetic Technologies AUS$5 million in cash, AUS$2.5 million worth of "in-kind" Genzyme intellectual property, and agreed to pay a fee of AUS$1 million a year over the life of the non-coding patents, currently scheduled to expire in 2015.

GTG's Key Non-Coding DNA Technology Patents

The abstracts for the US patents at issue in the case appear to be fairly broad-based. Although Genetic Technologies has not sued any other companies in the US over the patents, the firm's CEO has warned that there are "hundreds" of others who may owe the company money for "past activities." Below are the abstracts defining the relevant patents.

US Patent No. 5,612,179, "Intron Sequence Analysis Method for Detection of Adjacent and Remote Locus Alleles as Haplotypes." Date issued: March 18, 1997. The abstract states that the "invention provides a method for detection of at least one allele of a genetic locus and can be used to provide direct determination of the haplotype. The method comprises amplifying genomic DNA with a primer pair that spans an intron sequence and defines a DNA sequence in genetic linkage with an allele to be detected. The primer-defined DNA sequence contains a sufficient number of intron sequence nucleotides to characterize the allele. Genomic DNA is amplified to produce an amplified DNA sequence characteristic of the allele. The amplified DNA sequence is analyzed to detect the presence of a genetic variation in the amplified DNA sequence such as a change in the length of the sequence, gain or loss of a restriction site or substitution of a nucleotide. The variation is characteristic of the allele to be detected and can be used to detect remote alleles. Kits comprising one or more of the reagents used in the method are also described.

US Patent No. 5,851,762, "Genomic Mapping Method by Direct Haplotyping Using Intron Sequence Analysis." Date issued: Dec. 22, 1998. According to the patent abstract, the "invention is an improved genomic mapping method which is able to generate highly informative polymorphic sites throughout the genome. In addition to being highly polymorphic, the sites can be used to generate patterns that identify allelic and sub-allelic haplotypes associated with the region."

According to Newing, licenses to academic researchers currently cost about AUS$1,000. "It's just to regularize the use of our patents, but we certainly don't want to stand in the way of research."

The academic licenses have come under fire from some critics, including National Human Genome Research Institute Director Francis Collins, who believe the technology patented by Genetic Technologies should be available for free to academics conducting basic research (see BioCommerce Week sister publication GenomeWeb Daily News 7/8/2003).

The Suit

Genetic Technologies filed its suit in the US District Court for the Northern District of California on March 26, 2003. The firm alleged that certain ABI and Celera products infringed its US patent 5,612,179, entitled "Intron Sequence Analysis Method for Detection of Adjacent and Remote Locus Alleles as Haplotypes." The patent covers "methods for amplifying genomic DNA with a primer pair that spans a non-coding region sequence and defines a DNA sequence in genetic linkage with the genetic locus," according to the suit.

The firm later added US patent 5,851,762, entitled, "Genomic Mapping Method by Direct Haplotyping Using Intron Sequence Analysis," to the complaint. ABI countered by filing a suit that claimed Genetic Technologies' patents were invalid.

Among the claims made in the lawsuit filed by Genetic Technologies were that Applera's units had manufactured and sold products that infringe the patents and had induced third parties to infringe the patents as well through training, instruction, or other advice on how to use Applera's products. In addition, Genetic Technologies claimed that Applera had willfully infringed the patents, and as a result it sought treble damages and attorneys' fees and costs, as well as an injunction preventing ABI and Celera from selling their products.

Settlement discussions between the firms began a year ago and ended last Friday with Applera taking a license, and both companies agreeing to seek the dismissal of all claims and counterclaims against each other in the case, according to Genetic Technologies.

Applera was the remaining hold-out among three companies that Genetic Technologies sued in March 2003. The other two, Covance and Nuvelo, eventually agreed to take a license and pay royalties on the patents.

Though the firms have not provided financial terms of the settlement, Genetic Technologies received a request on Monday from the Australian Stock Exchange seeking more detailed information on the settlement. Genetic Technologies responded by requesting a halt in the trading of its stock while it sought advice on how to satisfy the exchange's request without violating the confidentiality terms of the settlement.

Genetic Technologies also floated on the Nasdaq on Sept. 2, 2005.

— Edward Winnick ([email protected])

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