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Agilent, ABI Reach Settlement in Stratagene IP Dispute; Arizona Court Sides With Roche

This story originally appeared in Biocommerce Week, a newsletter that has been discontinued.
 
Agilent and Applied Biosystems said this week that they have settled all pending legal disputes related to ABI’s suit against Stratagene for allegedly infringing the firm’s thermal cycler patents.
 
The settlement lifts injunctions against Stratagene’s thermal cycler instruments in Germany and the Netherlands and settles pending cases in the US and France.
 
Elsewhere, a US District Court in Arizona has ruled that Ventana Medical Systems cannot use 20-year-old state statutes to protect it from Roche’s $3 billion hostile bid to acquire the firm.
 
Agilent, ABI Settlement
 
Though financial terms of the settlement between Agilent and ABI were not disclosed, Agilent said that it has taken a license to ABI technology related to real-time thermal cycler instruments in the research-related fields and specifically excludes human in vitro diagnostics.
 
Agilent also said that it has licensed certain ABI technologies related to Agilent’s PCR and real-time enzyme and kits.
 
The settlement ends a three-year legal dispute between ABI and Stratagene, which was acquired by Agilent in June for $250 million (see BioCommerce Week 6/13/2007).
 
Stratagene had been the remaining holdout in a patent infringement suit filed in November 2004 by ABI against Bio-Rad Laboratories, MJ Research, and Stratagene (see BioCommerce Week 11/18/2004). That initial suit was filed just hours after Applera had received US Patent No. 6,814,934, entitled, "Instrument for monitoring nucleic acid amplification."
 
In September 2005, a federal court granted an injunction preventing Bio-Rad, which acquired MJ in August 2004 for $32 million, from making and selling thermal cycler products that infringed Applera’s patents. Bio-Rad reached a settlement with Applera and partner Roche Molecular Systems in February 2006, which enabled Bio-Rad to resume selling its thermal cycler products in the US (see BioCommerce Week 2/15/2006).
 
In May, Stratagene was served with writs of summons in the District of the Hague in the Netherlands and in Paris for allegedly infringing ABI’s thermal cycler patents. Those cases resulted in an injunction in the Netherlands and an impending injunction in France.
 
Prior to its acquisition by Agilent, Stratagene officials had said frequently over the previous two years that the company would like to settle with ABI out of court — and court documents had shown the firms were engaged in negotiations, though never reached a deal.
 
Since the acquisition, Agilent officials have declined to discuss Stratagene’s outstanding legal disputes with ABI and other firms.
 
At Agilent’s Bio-Analytical Measurement Investor Forum in Delaware last week (see related article), Nick Roelofs, general manager of the Life Sciences Solutions Unit and a former senior manager at Stratagene, said that Agilent respects other companies’ intellectual property. He declined to comment further on any of Stratagene’s litigation.
 
Those other cases include a suit served earlier this year by Stratagene against Bio-Rad and its MJ Research and MJ Geneworks units for allegedly infringing four of Stratagene’s US patents: Nos. 6,054,263; 5,779,981; 5,288,647; and 5,395,591 (see BioCommerce Week 11/29/2006). The patents are related to thermal cycler technology and methods and instruments for irradiating biological specimens.
 
Stratagene also has appealed a $16.2 million judgment against it in a patent infringement case it lost to Invitrogen nearly a year ago (see BioCommerce Week 11/1/2006).
 
Arizona Court Boosts Roche Bid
 
Last week, the US District Court for the District of Arizona ruled that Ventana Medical Systems may not take “any action to invoke, apply, or enforce the provisions” of the Arizona Control Share Act and the Arizona Business Combination Act. The statutes, which were put in place 20 years ago to prevent foreign corporations from taking control of Arizona-based companies, could have delayed Roche’s ability to control Ventana for three years.
 
In June, Roche made a $3 billion unsolicited bid to acquire Ventana, which would provide Roche with a tissue-based diagnostics platform that it currently lacks and sees as an important piece of the oncology diagnostics market (see BioCommerce Week 6/27/2007).
 
Ventana’s board of directors scoffed at Roche’s offer, calling it “inadequate in multiple respects and contrary to the best interests of Ventana’s stockholders.”
 
At that time, Ventana’s board also sent Roche CEO Franz Humer a letter offering a list of reasons for snubbing the offer, and calling the offer “so far below a reasonable starting point for negotiations” that it will not engage in discussions with Roche about a deal in any way.
 
“Simply put, we believe that Roche is trying to capture value for its stockholders that rightly belongs to Ventana's stockholders,” Ventana Chairman Jack Schuler wrote, adding that Roche was making a grab for a “unique” strategic position in a market that offers a more lucrative future to company shareholders if Ventana keeps after its current strategy.
 
In addition to its efforts to invoke the Arizona anti-takeover statutes, Ventana has a “poison pill” defense in place that would enable existing shareholders to buy more shares of the company at half price if an outsider acquires at least 20 percent of Ventana’s shares.
 

Roche has challenged that poison pill in a separate suit filed in Delaware, where Ventana is incorporated. That challenge is ongoing.

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