In the opening salvo of Affymetrix's year-old patent-infringement suit against Illumina, Affy's litigation team will begin depositioning Illumina officials this week, starting a process that will ultimately lead to the start of a formal trial in October 2006.
The suit, which brings into sharp relief the patent-filing history of a former Affy scientist who defected to co-found Illumina, has emboldened Affy to promise "significant additional … litigation actions" against groups it believes are infringing its IP.
At stake are six Affymetrix patents (see sidebar) that the Santa Clara, Calif.-based array giant alleges are being infringed by Illumina.
In response to the lawsuit, filed on July 26, 2004 in US District Court, Illumina two months later said it is not infringing on the patents and that the IP is so broad as to be invalid.
"We assert that we don't infringe or that the patents in the case are invalid," Marc Sernel, an attorney representing Illumina, told BioArray News last week. Sernel said that Illumina is also claiming that Affy's suit represents "unfair competition" and "tortuous interference" in its business.
"Lawsuits suck up time. They are a highly and purely unproductive activity from the viewpoint of delivering a product to the marketplace."
While neither company has disclosed exactly which technology the lawsuits concern, the notice of deposition states that most of the testimony will deal with Illumina's flagship BeadArray platform, including its arrays, instrumentation, and software.
Illumina is also expected to answer questions from Affy attorneys about its "creation, preservation, destruction, and maintenance of documents related to CyVera" according to the company. Illumina acquired microbead developer CyVera in April for $17.5 million in stock and cash.
In an Aug. 9 filing with the Securities and Exchange Commission, Illumina stated that the suit against it "seeks an unspecified amount of monetary damages and a judgment enjoining the sale of products, if any, that are determined to be infringing these patents."
BioArray News was unable to access the actual complaint filed in July 2004.
According to a notice of deposition filed Aug. 8 in US District Court in Delaware, the state in which both firms are incorporated, Illumina's deposition in the case is scheduled to take place on Aug. 25 at the Hilton San Diego Airport/Harbor Island Hotel.
Illumina, which is headquartered in San Diego, has been ordered to "designate one or more officers, directors, managing agents, or other persons" to testify on the firm's behalf before Affymetrix's attorneys, according to the notice.
A scheduling order filed by the same court on July 13 declared that "fact discovery", which includes the taking of depositions from both firms, is to conclude by Oct. 14, 2005. The same scheduling order set the trial date for Oct. 16, 2006.
Access to documents has played a significant role in the legal interaction between Illumina and Affymetrix since Affy sued Illumina in 2004.
Since February, Affymetrix has filed three requests to obtain access to Illumina's confidential documents that relate to its BeadArray platform, requests that Illumina's attorneys have protested by seeking entry of a protective order that they hope will shield some of the company's more sensitive documents from the eyes of Affy's in-house litigation team.
On July 28, the US District Court granted Illumina's request for a protective order. Illumina had requested that "the Court should deny access to highly confidential and sensitive documents to Affymetrix's team of four in-house lawyers known as the Litigation Unit" on the grounds that Affy's attorneys report to its general counsel, which the firm called a "pipeline to management."
In turn, Affymetrix requested and was granted a similar protective order that would shield its sensitive documents from Illumina attorneys.
Still, the court denied Illumina's request that only one of Affy's attorneys be able to view its documents. Being rivals, both companies have stated in court that they do not wish their most confidential sources to wind up in the hands of each others' management teams.
Representatives from Affy and Illumina both declined to address the protective orders, or any details of the case. However, Illumina described in its SEC filing what could happen if Affy wins the suit.
"Any unfavorable determination, and in particular, any significant cash amounts required to be paid by us or prohibition of the sale of our products and services, could result in a material adverse effect on our business, financial condition, and results of operations," Illumina reported.
Bill Craumer, an Illumina spokesman, said that he could not comment on the case other than to say that he personally saw the litigation as a distraction from his firm's main objective.
"Lawsuits suck up time," Craumer told BioArray News last week. "They are a highly and purely unproductive activity from the viewpoint of delivering a product to the marketplace."
Craumer said that Affy's suit was a standard tactic in the industry.
"IP can be used effectively as an offensive tactic and certainly Affymetrix and Applied Biosystems are good examples of that," he said.
Illumina settled a lawsuit with ABI in 2004 for $8.5 million after ABI filed a complaint against Illumina for patent infringement (see BAN 9/1/2004).
The Ex-Affy Factor
Still, while the Affy suit is the second case Illumina has faced against a rival, the irony can't be lost on some Illumina officials who used to work at Affymetrix. There are a number of ex-Affymetrix employees at the firm, including Craumer himself, who previously served as Affy's director of marketing communications.
The firm added Christian Henry, a former Affymetrix vice president of finance corporate comptroller, as chief financial officer in June 2005.
Even more central to Illumina's link with Affymetrix has been Mark Chee, a former scientist at Affymetrix who co-founded Illumina in November 1998. Chee served as the company's vice president of genomics until 2002, when he left the position to act as an Illumina Research Fellow. Since then he has continued to serve on its scientific advisory board (see BAN 7/6/2002).
In fact, Chee is a central figure in the patent dispute because he is credited as the lead inventor on two of the six patents upon which Affy alleges Illumina is infringing: US Patent No. 6,607,887 and US Patent No. 5,795,716, both titled "Computer-aided visualization and analysis system for sequence evaluation" (see sidebar).
The two are variations on the same invention, although there is no assignee listed on one patent, while Affy is listed as the assignee on the other.
Altogether Chee was credited as the lead inventor on 30 separate Affymetrix patents before he moved to Illumina, where he is also credited as the lead inventor on 10 patents. Chee, who recently moved on to form a new company called Prognosys Biosciences according to Craumer, could not be reached to comment on the case.
Craumer explained in an interview that these close relationships between companies were common in an industry that he described as "very fraternal." He noted that Scott Greer, a former member of Illumina's board, had recently signed on as an advisor at rival CombiMatrix (see BAN 8/3/2005).
A Litigious Industry
However fraternal the array industry may be, it is clear from recent events that it is no less litigious now than it has been in the past.
On June 23, a judge in US District Court sided with Affymetrix, after the company was named in a patent infringement case by Multilyte, a British firm that had initially argued that Affy was infringing on eight of its patents, though it later dropped the number down to three.
Michael Plimack, the attorney who represents Multilyte, said the case is going on appeal to the federal circuit. Plimack told BioArray News last week that the court had ruled that Affy did not infringe, and that costs in the case would be determined at a hearing next month. Plimack also said that Multilyte's "appeal has been docketed and the opening appeal brief is due in September."
Affymetrix also responded to a 2003 suit initiated by Farmingdale, NY-based Enzo Biochem that argued Affy had reneged on some of its duties as a distributor and that some of Affy's IP should be distributed to Enzo, by filing its own lawsuits alleging that some of Enzo's IP was invalid. According to a spokesperson for Enzo that case is now in the discovery phase.
Still, while Affy's aggressiveness has paid off in the case of Multilyte, it has been less fortunate in Europe, where in February, the opposition division at the European Patent Office revoked an Affy patent after it was opposed by rivals PamGene, CombiMatrix, Abbott Laboratories, Applera and others. Affy's attorneys appealed that case last month (see BAN 8/10/2005).
Affy's August SEC filing warned that the company is preparing to defend more of its IP in the future. "Our intellectual property is expected to be subject to significant additional administrative and litigation actions," Affy reported.
"In Europe and Japan, third parties are expected to oppose significant patents that we own or control. These procedures will result in the patents being either upheld in their entireties, allowed to issue in amended form in designated European countries, or revoked."
— Justin Petrone ([email protected])