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Federal Court Upholds Decision Against Qiagen

By a GenomeWeb staff reporter

NEW YORK (GenomeWeb News) – A US federal court has upheld a decision by an arbitration panel that ruled in favor of Gen-Probe and Roche and against Qiagen in a dispute over a supply and purchase agreement for human papillomavirus products.

In a decision rendered last week, Judge William Pauley of the US District Court for the Southern District of New York, dismissed a motion by Qiagen, in essence, to overturn a decision reached last year by a three-person arbitration panel that Roche had not violated the terms of a supply and purchase agreement between the two companies.

As a result, Qiagen will have to pay about $3 million each to Roche and Gen-Probe.

Qiagen's predecessor Digene initiated arbitration proceedings against Roche in late 2006 alleging Roche had impermissibly provided Gen-Probe with products and had issued a sublicense to Gen-Probe. Both were in violation of the original agreement, Digene alleged.

Digene's predecessor, Life Technologies — a different entity from the current company with the same name that resulted from the merger of Applied Biosystems and Invitrogen — and Roche's predecessor, Pasteur Institute, forged the original agreement in 1990.

Digene was bought by Qiagen in 2007.

In its decision, the arbitration panel said Qiagen would have to pay Roche and Gen-Probe each $3 million. Last August, Qiagen filed a petition with the New York State Supreme Court to vacate or modify the award.

Following petitions from Roche and Gen-Probe, the case was moved to federal court.

In its petition to vacate the panel's decision, Qiagen said that the panel disregarded the law by "ignoring the collateral estoppel effect of a prior arbitration," or in short, a legal doctrine that in effect prevents a party from relitigating an issue. It also said that Gen-Probe should not have been a party to the legal action, and that the panel exceeded its powers and "improperly refused to hear evidence and decide material issues."

Pauley rejected all of Qiagen's arguments, however.

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