Nanogen and Motorola have settled their patent infringement dispute, with Nanogen agreeing to pay Motorola $5 million in cash and stock for a license to two claims of the patent at issue.
This settlement removes a potential obstacle in the way of both companies commercializing their somewhat similar electricity-based DNA detection systems for diagnostics. Motorola is in the process of bringing its eSensor Platform, which uses label-free bioelectric detection, to the market as a lab-based diagnostic test, while Nanogen, under its new CEO Randy White, has recently plunged into the diagnostics arena with its programmable electrode probe arrays.
While the settlement could also be seen as a setback for Nanogen and a break for Motorola in this neck-and-neck DNA diagnostics race, Nanogen is well funded enough, with $87.3 million in cash and short-term investments at the end of the first quarter, to swallow the payment without being thrown off course.
By coming to a settlement, both companies also avoid further legal costs, said White in a statement. We are pleased to put the action behind us and we will continue to commercialize the NanoChip Molecular Biology Workstation in the clinical research market and to develop it for potential use in the clinical diagnostics market.
Nanogen originally filed a declaratory judgment against Motorola, Genometrix, and MIT in April 2000 alleging the invalidity of patent Number 5,653,939, entitled Optical and electrical methods and apparatus for molecular detection. The patent was initially assigned to MIT in 1993, and then licensed to Beckman Coulter and Genometrix, the latter of which sublicensed the patent to Motorola.
A month after this action, Motorola filed a counterclaim, alleging infringement of the patent. The same month, Beckman Coulter granted Nanogen a license to the patent.
In the settlement, Nanogen is licensing claims 16 and 39 of this patent from Motorola. The company is also dropping its declaratory judgment against Genometrix, which closed its doors in June, and MIT.