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Thermo s Patent Infringement Lawsuit Could Affect ABI s Sequencer Business

Thermo Finnigan is suing Applera for allegedly infringing a decade-old patent covering capillary electrophoresis as used in Applied Biosystems’ lucrative line of instruments for DNA analysis.

In a suit filed on Dec. 8 in the US District Court of Delaware, Thermo Finnigan, a unit of Thermo Electron, claimed that Applied Biosystems’ DNA analysis products such as the Prism 3700 infringe on intellectual property covered in its 1995 US patent No. 5,385,654 entitled “Controlled-Temperature Anion Separation by Capillary Electrophoresis.”

Potentially at stake in this lawsuit is ABI’s dominance of the DNA sequencing market and its installed base of some 10,000 automated sequencers, as estimated by Dublin, Ireland-based Research and Markets. The company’s sequencer products have produced more than $1 billion in revenue since the capillary-electrophoresis-based 3700 technology replaced previous slab-gel-based sequencing products in 1999. The Prism 3700 was officially discontinued in early 2003, when ABI introduced its 3730 and 3730xl line of DNA analyzers.

“It could have a big impact on AB” if Applera is found to have infringed this patent, an industry executive familiar with ABI’s DNA-sequencing business told BioCommerce Week. The executive asked for his comments not to be attributed by name.

In court documents, Thermo said it is seeking damages “no less than a reasonable royalty,” as well as interest, legal fees, and “appropriate relief” if Applera is found to have willfully infringed.

Officials from Applera and Thermo declined comment.

Second Suit

Thermo’s litigation follows a September lawsuit filed by Applera, MDS, and Applied Biosystems/MDS Scientific Instruments in the US District Court of Delaware alleging that Thermo Electron’s mass spectrometer systems infringe US patent No. 4,963,736 entitled “Mass Spectrometer and Method and Improved Ion Transmission.”

The ‘654 patent was issued on Jan. 31, 1995, with Lenore Kelly, Dean Burgi, and Robert Nelson listed as inventors and Thermo Separations listed as the assignee. The patent describes a method for separating anions using capillary electrophoresis utilizing precise temperature controls. The patent refers to three separate patents listing William Jones and Petr Jandik as the inventors and Millipore as the assignee. A later patent held by Applera, No. 6,372,106, “Capillary electrophoresis method and apparatus for reducing peak broadening associated with the establishment of an electric field,” issued in 2002, references the ‘654 patent.

The industry executive, who asked not to be named, said that the infringement issue at the crux of Thermo’s lawsuit would likely revolve around the temperature-control invention in the patent.

“If that is the case, then this could impact all of AB’s current sequencers — if all of them control the [temperature] of the electrophoresis chamber,” he said.

Another expert, an independent consultant with expertise in capillary electrophoresis, told BioCommerce Week that it is not unusual to see patent infringement lawsuits filed long after a technology has been commercialized.

“It’s intriguing that they have waited this long, but some companies like to wait and see how the market develops,” he said, referring to the 10-year period preceeding Thermo’s filing.

He declined attribution, saying that he has served as an expert witness in similar suits, but is not involved in this case.

Market Leader

Clearly, ABI is the leader in the DNA sequencing-technology market, but its revenues from sequencing are in decline. For the most recent quarter reported, ABI reported $116 million in DNA sequencing revenues for the three-month period ending Sept. 30, the lowest revenue performance for at least the last 12 quarters, and down from $124.8 million for the same quarter in 2003. Still, the product line has been lucrative, accounting for 37 percent and 33 percent of the company’s revenues, respectively, for ABI’s FY ‘03 and FY ‘04. DNA sequencing revenues for FY ‘04 were $572.5 million, down from $631.7 million in FY ‘03.

In the capillary electrophoresis market outside DNA sequencing applications, Agilent Technologies and Beckman Coulter are the dominant players in a technology that competes with liquid chromatography in chemical analysis applications and can be used to analyze complex carbohydrates or protein-protein interactions. CE is used in the food and beverage industry for small ion analysis, and in biotechnology/pharma for quality assurance and quality control.

Agilent markets its technology as its Capillary Electrophoresis system, while Beckman Coulter sells its technology as P/ACE MDQ.

CE’s Future?

The future of CE-based technology is murky, as experts expect increasing competition from microfluidic chip-based technologies to lower analysis costs and increase throughput. Agilent is pioneering that market with its lab-on-a-chip products such as the HPLC chip product for proteomics applications that it expects to launch early this year (see BCW, 12/16/2004)

“In 10 years, I don’t expect to see CE being used, as capillaries are a little too finicky,” the consultant said. He added that “multidimensional” CE is being applied to proteomics analysis, but the technology is not sensitive enough to “see” low-abundance proteins.

The patent at issue in Thermo’s lawsuit expired on Jan. 31, 2003, due to failure to pay USPTO maintenance fees, according to the April 1, 2003 edition of the Official Gazette of the United States Patent and Trademark Office [http://www1.uspto.gov/web/patents/patog/week13/OG/TOC.htm].

It is unclear whether the company has paid the fees to reinstate the patent. A company spokeswoman declined comment on the issue, and Thermo’s lawyer did not return a request for comment in time for deadline.

— Mo Krochmal ([email protected])

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