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UPDATE: Affy s Stock Surges After UK Court Ruling, OGT to Appeal

This story has been updated from a previous version.

NEW YORK, Nov 1 – As Affymetrix stock continued to soar on the news of a UK Court's decision that it had a license to Oxford Gene Technology's microarray patents, OGT said it intended to petition the House of Lords for an appeal.

In midafternoon trading, Affy's stock was up 15 15/64, or more than 25 percent, at  75 5/16.

The UK court overturned a lower court's ruling that Affymetrix had not gained a license to patented nucleic acid hybridization technology developed by Ed Southern and owned by OGT, a UK Appeal court clerk confirmed.

The Appeal court denied Oxford Gene Technology's request to appeal the decision further, but the UK court system allows parties to petition the House of Lords, which is the country's court of last resort, for an appeal. OGT intends to begin this process, an official company statement said.

Other than this announcement, OGT had no further comment on the ruling or its bearing on an upcoming jury trial of a similar US patent infringement claim, which is set to begin November 6 in the U.S. District Court for the District of Delaware.

This ruling represents the latest turn in an ongoing legal battle between OGT and Affymetrix. OGT filed patent infringement suits in the UK and US against Affymetrix in late 1999, contesting that Affy’s technology infringed upon the so-called “Southern Patents” for the original microarray technology developed by OGT founder Ed Southern in 1988

Affymetrix has claimed in its defense that it gained license for these patents, which had been granted to Beckman Instruments (Now Beckman Coulter), when it purchased Beckman’s business in 1991.   

Lord Justice Aldous, who delivered the leading judgment Thursday, concluded " Affymetrix has a license as a result of the purchase of the business of Beckman.”

The corresponding US patent infringement trial will cover several issues, including whether Affymetrix is infringing on Ed Southern’s patents, whether that infringement was willful or not, and whether OGT’s patents are valid. OGT is seeking $300 million in damages, an injunction, and/or royalties.

Although the American courts are not bound by the UK court’s decision, the reasoning used by the Lord Justices could have bearing on the Delaware trial.

“In light of this decision, Affymetrix now looks forward to a determination in the US District Court in Delaware that its current products are not covered by any valid OGT claim, in which case Affymetrix may no longer need to pay royalties to OGT," Phil McGarrigle, chief intellectual property counsel for Affymetrix, said in a statement. " Furthermore, our freedom to operate under OGT's patents is now clear and unequivocal, if we should need it."

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