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A Series of Settlements for ABI, But A Few Cases Remain Outstanding

Applied Biosystems and parent Applera have settled several lawsuits over the past 10 months, most of which relate to PCR patents held by the firm and its partner Roche Molecular Systems. Though it may be nearing a settlement with Stratagene, ABI still has several cases wending their way through the courts.

According to a filing with the US District Court District of Connecticut dated June 30, Stratagene is seeking to push back some deadlines in its ongoing litigation with Applera, the parent of Applied Biosystems, as it negotiates a settlement (see related article). If the litigation with Stratagene is settled, that would mark a fifth settlement — and fourth related to PCR patents — that ABI has settled in the past year.

The firm, though, still has some litigation outstanding — most notably as a defendant in a patent infringement suit filed by Thermo Electron unit Thermo Finnigan, which a court has stayed while the parties wait for the US Patent and Trademark Office to re-examine the patent at issue. Also ongoing is a patent infringement suit related to labeled and modified nucleotides filed by Enzo Biochem and Yale University.

In addition, Molecular Diagnostics Laboratories, an Ohio-based genetic testing lab, last week filed an amended class action suit against ABI and Roche for alleged anticompetitive practices in selling Taq polymerase. The firm also claims that the patent for Taq, which was initially granted to Cetus in 1989 and subsequently licensed to Roche in 1991 for $300 million, "was obtained by misconduct through a series of material misstatements and omissions to the PTO, made with the intent to deceive the PTO."

The suit mirrors a complaint Molecular Diagnostic Labs filed in Sept. 2004 against ABI and Roche but has added Roche Diagnostics as a co-defendant.

According to Molecular Diagnostic Labs' amended filing, "Applera and/or its predecessors have enjoyed and exploited the market dominance that was knowingly and improperly obtained through issuance of the [Taq] patent" — US Patent No. 4,889,818.

Molecular Diagnostic Labs has asked for a trial by jury and a judgment against ABI and Roche "in an amount equal to three times the amount of damages the plaintiff class has sustained because of defendants' actions."

An Applera spokesperson said this week that the firm does not comment on outstanding litigation.

The Settlements

Over the past 10 months, Applera has settled four cases, the most recent of which was announced two weeks ago when Applera and Beckman announced that they had resolved all outstanding legal issues regarding Beckman Coulter's capillary electrophoresis technology and Applera's allegations of breach of contract. The companies said that the terms of the agreement are "consistent" with those of a preliminary agreement that they disclosed in April (see BioCommerce Week 5/3/2006).

At the time, the companies said that Beckman would grant Applera licenses to its patents for replaceable gels for capillary electrophoresis instruments and DNA sequencers, and to its patent for a heated lid for thermal cyclers. Applera would subsequently pay Beckman $35 million to "release ... any and all claims of infringement relating to DNA sequencer and thermal cycler products."

Under the preliminary terms, Applera also agreed to grant Beckman licenses to its patents for nucleic acid sequencing and real time PCR thermal cycling for use in the diagnostics market. Consequently, Beckman would pay Applera's Celera Genomic segment $20 million over 30 months for rights to use the technology in that market.

In February, Applera and Roche settled a long-standing patent infringement suit against Bio-Rad Laboratories and its MJ Research unit, enabling MJ to resume selling its thermal cyclers products in the US (see BioCommerce Week 2/15/2006). The settlement came after the court had already awarded Applera and Roche over $35 million in damages in the case.

In December 2005, following three years of litigation, Applera 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 (see BioCommerce Week 12/15/2005).

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

The first in the series of ABI's settlements occurred in Sept. 2005, when ABI and Promega settled a complaint filed by Promega alleging that ABI and Roche had overcharged the US government for thermal cyclers and PCR reagents. The so-called Qui Tam suit, in which the government declined to participate, was dismissed in June 2004. The settlement between the firms ended appeals in the case and opened the door for Promega to negotiate a license to ABI's PCR patents.

— Edward Winnick ([email protected])

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