NEW YORK (GenomeWeb) – Illumina and Sequenom said today that they will pool all their owned and in-licensed intellectual property relating to their respective noninvasive prenatal tests, including those that are the subject of interference proceedings, effectively ending four years of patent disputes.
Under the agreement, Illumina will have exclusive worldwide rights to use the pooled IP to develop and sell in vitro diagnostic kits for NIPT and to license the IP to third-party laboratories that want to develop and sell their own laboratory-developed tests.
Sequenom and Illumina will each have rights to use all pooled patents to develop and sell their own LDTs.
The firms will share the revenue from the patent pool, and Illumina will pay Sequenom a royalty on sales of IVD kits.
In addition, Illumina will pay $50 million upfront to Sequenom. It will also make ongoing payments to Sequenom from the patent pool structure through 2020.
"This settlement will allow for easier access to both parties' NIPT technology by healthcare providers and their patients," Bill Welch, CEO of Sequenom, said in a statement. "We believe that pooling our intellectual property will enable us to continue to expand our NIPT laboratory test offerings while allowing Sequenom to participate more broadly in the growing global NIPT marketplace."
"The patent pool established through this agreement eliminates confusion over intellectual property rights and provides a single point of contact for those wishing to license this intellectual property for NIPT testing," Illumina CEO Jay Flatley said in the statement.
The NIPT field has been flush with patent disputes for the last four years. Most recently, the US Patent and Trademark Office Patent and Appeal Board nullified 13 claims of a patent held by Illumina, but several months earlier it also declared certain claims held by Sequenom to be unpatentable.
Separately, Illumina extended its supply agreement with Sequenom and will supply instrument and reagents to Sequenom for an additional five years.
In early Wednesday trade on the Nasdaq, shares of Sequenom jumped 23 percent to $3.75, while Illumina's stock was up a fraction of 1 percent at $188.67.