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Stratagene Posts $21M Bond to Secure Third Wave Damages

NEW YORK, Jan. 27 (GenomeWeb News) - Stratagene has posted a $21-million bond to secure damages awarded to Third Wave as part of its patent-infringement suit against Stratagene.

 

The bond was posted with the US District Court for the Western District of Wisconsin.

 

In September 2005, a federal jury found that Stratagene infringed two key Third Wave patents. It awarded Third Wave $5.3 million in damages, and prohibited Stratagene from making, selling, or offering to sell its FullVelocity QPCR and QRT-PCR products.

 

Three months later, a federal judge overseeing the suit tripled the damages awarded to Third Wave to $15.9 million, and ruled that Stratagene must pay Third Wave attorney fees.

 

Stratagene said it plans to appeal the District Court's decision in the Court of Appeals for the Federal Circuit in Washington, D.C., once a final judgement has been entered by the District Court. In addition, Stratagene said it will seek to have the damages amount reduced or eliminated.

Stratagene said the bond, which is in the form of cash, "shall remain in place until the patent infringement matter is concluded and Stratagene and the surety holder are released from liability by the court or the amount of the final judgment, if any, is paid."

Stratagene said it currently has approximately $9.5 million in other cash and cash equivalents which are not impacted by the bond, and its operations remain cash flow positive. The company's total amount of outstanding long-term debt is approximately $4 million and final payments on such long-term debt are not due until 2022. Stratagene also said has a $9-million revolving line of credit in place which has a zero balance currently outstanding.

When it appeals the verdict, Stratagene said it intends to raise the question of why the District Court's "prevent[ed] the jury from hearing evidence of Stratagene's patents on its FullVelocity technology and the determination by the US Patent and Trademark Office that Stratagene's patented technology was novel over the prior art (including technology described by Third Wave's patents)

The company also plans to bring up the District Court's "rejection of Stratagene's position that Third Wave's patents are invalid if they are interpreted as broadly as the District Court interpreted them."

Stratagene also said it believes that "other embodiments" of its FullVelocity technology "do not meet the limitations of the patent claims asserted by Third Wave, and it believes that these embodiments can be applied effectively in both the research and molecular diagnostics marketplaces."

Stratagene said it will record a non-cash, pre-tax litigation expense charge against earnings in the fourth quarter of 2005 in the amount of $21 million. As announced in October 2005, Stratagene received a one-time royalty payment and recognized approximately $23.3 million pre-tax income in the fourth quarter of 2005, which will offset the $21 million litigation charge.

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