Agilent Gains License to Incyte s Patent Portfolio to Fortify Array IP

Agilent’s move to license Incyte’s patent portfolio is an indication of how serious Agilent is in competing with Affymetrix, according to Incyte spokesperson Paul Chirrico. “Agilent is moving aggressively towards the microarray business, and is putting a dent in it,” Chirrico said.

The licenses on the pulse jet sample preparation patents are exclusive, while the others are non-exclusive, according to Chirrico.

Although the licenses will not directly affect the way Agilent makes its growing selection of microarrays, the exclusive license to the patents covering sample preparation methodologies “opens the possibility for an increased offering of reagents and reagent kits for sample preparation in the future,” said Agilent spokesperson Doug Forsyth.

“The licenses expand our array patent portfolio and increase our design freedom for future manufacturing technologies for arrays,” Forsyth added.

This licensing deal comes just over a week after Incyte formally announced it was pulling out of the microarray manufacturing and ser-vices business and cutting 400 jobs.

Although Incyte has licensed content from its LifeSeq gold database and its 600 or so patented full-length genes to other microarray manufacturers, including Motorola and NEN/PerkinElmer, this additional patent license to Agilent makes the Incyte’s Palo Alto neighbor by far its closest collaborator in the microarray sector.

“These technology licensing agreements underscore the growing collaborative relationship between Incyte and Agilent, which includes our earlier agreement regarding the supply of cDNA clones and LifeSeq data for Agilent-manufactured arrays,” stated Incyte CEO Roy Whitfield. “Incyte is pleased that Agilent’s customers will now have the benefit of Incyte’s array technologies as well as Incyte’s content.”

But this does not mean that Incyte sees Agilent as the favored heir to Incyte’s now-defunct array program. “We are going to continue to license these patents out” to other companies, Chirrico said.

The company is also treating all of its licensees equally when it comes to customer referrals. During a recent presentation given at the Chips to Hits conference in San Diego last week, Incyte senior scientist Chris Hopkins, who is leaving his post as director of Incyte’s microarray program, said that the company is merely referring customers of its now-defunct array program to a list of “third-party” array manufacturers. Customers said they were being referred to Motorola, Agilent, and NEN among others. This strategy, though, could change. Incyte is still ironing out how it will fulfill the service contracts of existing array customers, Hopkins and others have said.

Meanwhile, Agilent continues to expand. In January, Agilent opened a 15,000 square-foot DNA microarray production facility as part of its effort to expand its microarray manufacturing program, which included plans to ship more than one million microarrays per year by 2002. Two weeks ago, the company introduced a Human 2 cDNA microarray kit that represents more than 14,000 genes from Incyte’s Human Foundation One and Two cDNA clone sets, and complements the company’s Human 1 cDNA microarray. The company also announced it was developing an Arabidopsis gene expression array with Paradigm Genetics that would be available by the end of the year.

What’s in The Portfolio?

With these new additions to its portfolio, Agilent hopes to expand its operating space in the microarray business, but it could also be walking into Incyte’s patent infringement troubles.

Incyte is currently engaged in a multi-pronged litigation battle with Affymetrix that includes two patents in the linear amplification family that Incyte has licensed to Agilent. These patents, US Patent Numbers 5,716,785 and 5,891,636, cover inventions by Russell Van Gelder, an inventor of linear amplification methods. Both are entitled “Processes for genetic manipulations using promoters” and cover amplification using an RNA polymerase and an RNA polymerase promoter region. Incyte sued Affymetrix in early 2000 for infringement of these patents.

Forsyth said licensing Incyte’s patents does not make the company a party to the litigation. But Affymetrix has already stated that it believes these patents are invalid due to prior art (a substantially similar invention that predates the patent), by an Affymetrix scientist. If the company wins on this point when Incyte’s patent infringement suit against Affymetrix goes to trial next year, Agilent’s licenses to these patents would become effectively worthless.

Incyte believes it has the upper hand in this litigation, pointing to its favorable settlement in January with Gene Logic. In the settlement, based on a lawsuit in which Incyte alleged that Gene Logic had infringed patent numbers 5,716,785 and 5,891,636 along with one other patent, Gene Logic had to pay $9 million to Incyte.

A key piece of evidence from this suit, which Incyte is bound to bring up in the Affymetrix lawsuit is Gene Logic’s defense to the infringement claims. The company said it was only using “a process that Affymetrix Ö recommends be used in preparation of samples for use with the Affymetrix GeneChip,” according to a 10-Q form filed with the Securities and Exchange Commission in late 2000.

Even if Incyte loses this suit, however, Agilent also has licensed a formidable array of other patents from Incyte (see box below). With these patents, Agilent hopes it will be able to safely move further into the Affymetrix-dominated microarray marketplace.

— MMJ