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Confusion Reigns as ABI, Bio-Rad Dispute Resolution of PCR Patent Suit

The ongoing PCR patent litigation in the US between Applied Biosystems and Bio-Rad's MJ Research subsidiary reached another milestone last week when ABI declared that a US court barred Bio-Rad Laboratories and MJ Research from making or selling PCR thermal cyclers that infringe three patents held by Applera.

Three days after the permanent injunction was handed down, Bio-Rad said in a company statement that it was "dismayed," since it believed it had reached a settlement with ABI. The settlement, which Bio-Rad had not yet made public, "has been communicated to the court by both parties," according to the Bio-Rad statement. Together with Bio-Rad's existing license to Applera's patents, the settlement allows MJ Research to continue selling its thermal cyclers, Bio-Rad said.

"We intend to pursue the enforcement of the settlement agreement and clarify our license."

Bio-Rad Treasurer Ron Hutton told BioCommerce Week in an e-mail message that the settlement, terms of which remain confidential, was reached on Aug. 30, the day the injunction was issued. "We intend to pursue the enforcement of the settlement agreement and clarify our license," he said.

However, an ABI spokeswoman contradicted this, telling BioCommerce Week by e-mail that the two companies "were in settlement discussions, however a formal settlement was not reached prior to the court issuance of the injunction." Asked how the settlement claimed by Bio-Rad would affect the injunction, she responded, "There is no settlement, therefore, the injunction stands."

The injunction, issued by the US District Court for the District of Connecticut in New Haven, prohibits MJ Research from making, using, offering, or selling thermal cyclers in the US that infringe certain claims of Applera's US patents 5,333,675 and 5,475,610. In issuing the injunction, Judge Janet Bond Arterton wrote, "Applera will suffer irreparable harm if defendants' infringement is not enjoined."

In addition, MJ Research is banned from servicing, repairing, advertising, instructing, or otherwise promoting the use of thermal cyclers for PCR that infringe the '675 and '610 patents, as well as Applera's US Patent 5,656,493.

Three Applera-held PCR process patents that expired in late March — US patent 4,683,195; 4,683,202; and 4,965,188 — were explicitly excluded from the ruling.

"There is no settlement, therefore, the injunction stands."

Bio-Rad holds a license to Applera's '675 and '493 patents and certain claims of its '610 patent. However, under dispute is whether that license also covers MJ's thermal cyclers now, after MJ Research was acquired by Bio-Rad last August for $32 million in cash plus the assumption of liabilities related to patent infringement litigation. According to Hutton, the license "may or may not include certain features of MJ's machines." ABI, however, maintains that "under the terms of the license, the MJ Research thermocyclers are not covered," according to the spokeswoman.

It was not immediately clear how the injunction will affect Bio-Rad's revenues or MJ Research customers.

The injunction is based on a jury verdict from 2004 showing that MJ Research and two of its founders — Michael and John Finney — infringed the patents, awarding ABI and Roche Molecular $19.8 million in damages. At the end of March, the court increased the damages, awarding ABI and Roche an additional $15.6 million (see BioCommerce Week 4/7/2005). The court also dismissed all of MJ's antitrust counterclaims against ABI and Roche.

Applera and Roche originally sued MJ Research in 1998. Bio-Rad, which acquired MJ last year, also set aside $50 million in a contingency settlement fund in the fourth quarter of 2004 to cover legal-related expenses associated with MJ.

During a conference call following the release of the firm's second-quarter results last month, Bio-Rad President and CEO Norman Schwartz said that the firm was "inching closer to resolving the litigation" with ABI (see BioCommerce Week 8/11/2005).

— Julia Karow ([email protected])

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