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Nanogen Becomes the Fourth Firm to Settle in Oxford Gene Technology Suits

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After 11 months of legal maneuvers, Nanogen is the latest company to settle in the wake of patent infringement lawsuits filed last December by Oxford Gene Technology.

Bruce Huebner, the chief executive officer of San Diego-based Nanogen, confirmed the settlement to BioArray News. Details were not disclosed. According to court documents, the suit was “dismissed without prejudice,” leaving open the possibility of a suit being brought if the terms of the settlement are not followed.

“We reached an amicable settlement,” said Huebner. "We don't feel that we technically infringe, and they don't feel that we technically infringe with our current applications."

Nanogen did not issue a public statement regarding the settlement, but included this statement in its third quarter financial statement:

“In December, 2002, Oxford Gene Technologies (OGT) filed a complaint against the Company in the United States District Court for the District of Delaware claiming that Nanogen infringes U.S. Patent No. 6,054,270 (the ‘270 Patent’) entitled ‘Analyzing Polynucleotide Sequences.’ In April 2003, Nanogen filed an answer to the complaint that denies that it infringes the ‘270 Patent. In October 2003, the Company and OGT entered into a settlement agreement pursuant to which the lawsuit was dismissed by OGT without prejudice. For the three and nine months ended September 30, 2003, litigation and settlement of patent matter costs totaled $149,000.”

Nanogen is the fourth company since May to settle with UK-based OGT, the firm that manages the intellectual property of microarray pioneer Sir Edwin Southern, and is jointly owned by him and Oxford University. Previously, BioDiscovery, Axon Instruments, and Genomic Solutions, a subsidiary of Harvard Bioscience of Holliston, Mass., had settled with OGT. In all of the cases, financial details were not disclosed.

For OGT, this is by no means the end of its legal pursuits. It has patent infringement suits still working against Motorola over its eSensor electronic arrays in the US District Court for the Northern District of Illinois, in an action filed on Dec. 13, 2002; and against Mergen of San Leandro, Calif., BD Biosciences Clontech of Palo Alto, Calif., and PerkinElmer Life Sciences of Wellesley, Mass., in a suit filed in Delaware on Dec. 23, 2002.

The underlying patent in the Nanogen case, 6,054,270, was issued to Oxford Gene Technology in 1997, with Southern as the listed inventor. It broadly covers analysis of polynucleotide sequence in which “a support, e.g., a glass plate, carries an array of the whole or a chosen part of a complete set of oligonucleotides which are capable of taking part in hybridization reactions,” and in which the sequence or fragments “are labeled and applied to the array under hybridizing conditions.”

Nanogen, which went public in 1998, is commercializing the NanoChip system, a microarray platform based on silicon and electricity.

In May, Genomic Solutions, a subsidiary of Harvard Bioscience of Holliston, Mass., announced that it had settled with Oxford Gene Technology and would pay an undisclosed “nominal amount” as well as display notices on any genomic-related products that it sells. Both Genomic Solutions and Axon Instruments have posted notices on their websites.

BioDiscovery did not make a similar notice, but has posted the press release relating to the settlement, which contains similar wording.

Oxford Gene Technology v. Motorola is scheduled to go to trial on July 19, 2004, while the other suit, in the US District Court of Delaware, is scheduled to go to trial in early 2005, according to court documents.

Huebner said that the settlement allows his company to proceed unencumbered.

“We have the avenue to go forward without significant constraints in our practice,” he said. “[The suit] could have gone into the millions [of dollars]. We are a small company with limited resources. This eliminates that distraction.”

In November, Nanogen reported total revenues of $1.7 million for its third quarter, compared to the same amount for the year-ago period, and up from the $1.6 million reported for the second quarter. The company recorded a net loss of $7.1 million for the quarter, compared to a loss of $8.2 million for the year-ago quarter. The company reported cash, cash equivalents, and short-term investments of $32.6 million, an increase of $4.1 million on hand at the end of the second quarter, attributable to a private equity placement resulting in $7 million in gross proceeds.

In December 2002, Nanogen received approximately $10.8 million in income in the fourth quarter of 2002 as a result of a patent infringement settlement agreement with CombiMatrix, Acacia Research’s subsidiary. Nanogen also received cash payments totaling $1 million (recognized in the third quarter of 2002), and will receive royalty payments of 12.5 percent on sales of products developed by CombiMatrix incorporating the disputed technology.

The settlement only adds to the sheen around the Southern patents as the intellectual property keystones to in situ techniques for constructing microarrays.

The company has licensed its patents to Agilent Technologies and Amersham, the No. 2 and No. 3 companies, respectively, in the pre-printed microarray sector. In 2001, OGT and Affymetrix settled a series of cross-Atlantic lawsuits between the two firms.

— MOK

OGT Coverage in BioArray News

  • With New OGT License in Hand, CodeLink Aligns for Clinical Future — or ImageGenomics? [BN 11/12/2003]
  • BioDiscovery Settles with Oxford Gene Technology in Patent Infringement Lawsuit [BN 10/29/2003]
  • OGT Lawsuits Slated to go to Trial in 2004, 2005; Company and Nanogen in Mediation [BN 8/13/2003]
  • OGT’s Peter Hotten on Microarrays and Intellectual Property [BN 8/13/2003]
  • Add One More Defendant to OGT’s List: UK Firm Sues Motorola Over eSensor Biochip [BN 7/23/2003]
  • Axon Becomes Second Microarray-related Firm to Settle Out of Court with Oxford Gene [BN 6/25/2003]
  • OGT vs. Nanogen Heads to Mediation; Mergen Defiant While Axon Is Talking [BN 6/4/2003]
  • Oxford Gene Technology Files Suits Against a Wide Array of Companies [BN 1/3/2003]
  • Pioneering DNA Microarray Patent Upheld in Europe: Licenses Anyone? [BN 11/30/2001]

 

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