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Patent Considerations Key in Microarray Market: Tips on Navigating the IP Minefield


BOSTON — The microarray industry has been notoriously litigious over the past five years, with just about every company entering the space becoming involved in a patent dispute with either Oxford Gene Technology, which manages the intellectual property developed by Edwin Southern, or Affymetrix, which holds a broad-based patent covering its microarray technology.

As companies either consider entering the microarray industry or expanding their applications within the segment, there are several issues they must take into account if they want to avoid costly, protracted litigation — such as that undertaken by OGT and Affymetrix in a patent dispute settled in 2001 — and they may want to consider taking a license. Earlier this year, Affymetrix said it would make $62.5 million in payments to OGT in a buyout of its remaining obligations under their settlement. (see BAN 6/16/2004)

The Santa Clara, Calif.-based microarray industry leader is just one of many firms that have either settled litigation or licensed rights to the Southern patents. In a presentation at IBC Life Sciences’ annual Chips to Hits conference held here last week, Paul Booth, a patent attorney with Heller Ehrman White & McAuliffe, said, “If you’re working in this field, you’re almost certainly going to get a letter from someone at OGT. It’s rather difficult to prepare a spotted array without infringing on [Southern’s] patent.”

Booth painted a somewhat startling picture of the legal challenges any company operating in the microarray space must confront. He pointed out seven key freedom-to-operate issues that microarray vendors face: the nature of the substrate design, the array format, methods for preparing the array, methods of preparing the sample, methods of using the array, methods of data analysis, and molecules on the array.

Speaking in general about patents, he told conference attendees, “When you get a patent, you can stop people. You can exclude others. But what you don’t get is any affirmative rights to actually do anything. And the reason is because your technology, even though it may be perfectly patentable, could be dominated by patents owned by others. It’s a very common situation.”

He said there are two kinds of patent infringement. Direct infringement is “when you directly practice, for example, a method within the patent. You make a microarray that falls within a claim.” The second type, indirect infringement, is when somebody else infringes because you caused them to. “It’s a very common issue that comes up with microarray sales and use,” Booth said.

He further explained that there are two types of indirect infringement. “There’s inducement and infringement and there’s contributory infringement. Inducement and infringement requires active infringement. For example, when you sell a microchip with detailed instructions on how to prepare a sample using a method covered by somebody else’s patent. You need something like instructions or you need a salesperson going into a lab and saying, ‘Do it this way.’ The second situation is contributory infringement, and that’s when you use [a product, in this case, an array] that has no substantial non-infringing use. The person who sold you that chip is contributing to your infringement.”

Broad Patents = Lots of Litigation

Several of the early patents granted to microarray manufac-turers by the US Patent and Trademark Office were very broad in their scope — most notably the patents that were granted to Affymetrix covering its array format and to Southern, from work he did at Oxford University, covering methods of preparing the array. The result has been an enormous amount of litigation in the microarray industry, and judging by the language of those two patents, that is not likely to subside (see sidebar, p. 6).

Booth referred to the patent granted to Affymetrix as “the 800-pound gorilla,” and said the firm has “several that are similar. It’s rather a broad claim. I think it’s one that anyone making an array will have to consider.”

“You could certainly infringe on several of those patents that were already there,” he said, referring to the Affymetrix and Southern patents, as well as a couple of patents held by Incyte, “and you’re going to be paying homage in patent licensing fees to several companies if you’re not careful.”

“Your problem isn’t over when you’ve sold your array,” as you can still be open to liability, Booth said. “The user faces all of the issues that the vendor faces, maybe apart from the one about how the chip was made.”

He cautioned users that ignorance of patents covering the array technology they are using is not a legitimate defense. “You need to be careful what you’re buying, and what rights you get. Don’t automatically assume that you get all the rights to do everything you want with the chip.”

“There is no experimental use exception in the US,” Booth warned those who use array technology in experiments at academic centers and research facilities. However, “There has been an exception of infringement for when you’re generating data that is being submitted to the FDA, and that had been expanding under the law for several years [but] was recently cut down fairly significantly by recent decisions,” he said.

Although the broad patents that were issued during the nascent stage of the microarray industry present a challenge that startups and other developers should con-sider, Booth noted that it’s not as daunting as certain other industries, such as automobiles, and he doesn’t believe the patent issues are a significant barrier to entry.

— EW


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