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Navigenics' Large-Scale Services Model, Not GeneChip Itself, at Issue in MIT/E8 Infringement Suit

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A lawsuit filed last week against Navigenics regarding its use of Affymetrix's GeneChip microarrays could raise questions for other customers of Affy's microarrays. However, a patent attorney who is following the case said that it is Navigenics' use of the arrays for its national genomics services business — not the GeneChip itself — that made it the target of the suit.

The suit, filed May 20 by the Massachusetts Institute of Technology and MIT spinout E8 Pharmaceuticals, claims that Navigenics is infringing a specific genotyping and DNA analysis method, so other customers applying the same method when using Affy's arrays risk facing similar legal liability, Timothy McBride, an attorney for Senniger Powers who specializes in biotechnology patent prosecution, told Pharmacogenomics Reporter this week.

"The patent that's being sued on is a method, as opposed to the GeneChip itself. So, anybody that is practicing this method that MIT and E8 own a patent to is subject to suit," McBride said. However, he added that MIT/E8 will likely not go after other GeneChip users, since those customers would be using the method and products at issue on a much smaller scale than Navigenics.

In the suit, the plaintiffs allege that the consumer genomics firm is infringing a genotyping patent that was issued to MIT and licensed to E8. The suit was filed regarding US Patent No. 6,703,228, for "methods and products related to genotyping and DNA analysis," which was issued in 2004 and covers the use of SNPs to perform high-throughput genome scans.

The suit, filed in US District Court for the District of Massachusetts, claims that Navigenics "has directly infringed the '228 patent by providing, selling and offering to sell, on a nationwide basis, genetic counseling services that use certain GeneChip products manufactured by Affymetrix," including, but not limited to, the company's 6.0 Array and associated reagents, "in the patented methods claimed in the '228 patent."

Furthermore, the suit notes that because Navigenics earlier this year took over Affy's clinical testing services business, the firm "has taken over infringing activities that were previously performed by Affymetrix and has continued to provide, sell and offer to sell services that directly infringe the '228 patent."

This is the second time MIT and E8 have filed suit regarding the '228 patent. Last July, MIT/E8 filed a lawsuit in the US District Court for the District of Massachusetts, claiming that Affy is infringing the '228 patent through the "use, manufacture, and sale of GeneChip products and services … as well as Affymetrix’s inducement and contribution to its customers’ use of the pioneering technology claimed in the '228 patent."

"Navigenics believes the suit to be without merit and will vigorously defend itself," a spokesperson for the company told Pharmacogenomics Reporter this week.

"This is old news," the spokesperson continued. The suit "adds a new party but there is no new substance … Navigenics does not foresee the suit having any significant impact on its operations."

Earlier this year, Affymetrix transferred to Navigenics ownership of its 10,000-square-foot Clinical Services Lab in Sacramento, Calif., in order to refocus its business strategy on being a platform provider. Speaking to Pharmacogenomics Reporter at the time, Navigenics Chief Medical Officer Vance Vanier said that the company decided to acquire Affy's lab because the company had seen an increase in the volume of orders for its genetic screening service [see PGx Reporter 03-18-2009].

While the MIT/E8 patent suit against Affy was filed approximately eight months before Navigenics took over the Clinical Services Lab, it is unclear whether Navigenics anticipated at the time that it would be embroiled in a patent infringement lawsuit for a technology that it had no part in developing.

According to McBride, MIT/E8's claims against Navigenics are not surprising. "If a company was being sued for its use of a particular technology and another company came along and purchased that division that uses the technology, one would expect that [second] company would be sued as well," McBride said.

"This lawsuit is mostly about the service Navigenics is offering, rather than the GeneChip itself," he said, adding that MIT/E8 most likely decided to go after Navigenics due to the scale at which the company is applying the methodology at issue.

Navigenics has not disclosed the number of tests it has run to date, but the company is using Affy's GeneChip microarrays for its own direct-to-consumer genomics service, as well as in a research collaboration with the Scripps Translational Science Institute, Affy, and Microsoft to genetically screen 10,000 participants [see PGx Reporter 10-14-2008].

In an update to Pharmacogenomics Reporter this week, Eric Topol, Scripps Translational Science Institute director, said that the research collaboration is "going particularly well" with Navigenics. "We have enrolled over 5,000 individuals for our prospective study of genome wide scans and their impact on lifestyle, psychological metrics, and medical screening/diagnosis," Topol said.

Navigenics launched its Health Compass genetic screening program two years ago, and earlier this year released a pared-down version of its service, Annual Insight, intended to encourage the incorporation of genetic risk data in customer's yearly physical examinations. The company also has marketing partnerships for its genetic screening services with a physicians group called MDVIP.

Navigenics' decision to acquire Affy's lab was strategic in that it allowed it to process Affy's Gene Chips in house rather than outsourcing that work to the microarray vendor. Navigenics' Vanier said at the time that having an internal CLIA lab would help it deliver test results sooner and allow it to launch new service offerings faster.

"If there are others using this method, then MIT and E8 may not go after them because they might be small-scale laboratories, professors in labs trying to replicate the methodology to see if it works as claimed. And there is not a lot of value in going after someone like that," McBride said.

"When it comes to a lawsuit, scale absolutely matters," he noted. "A lawsuit is not cheap." He estimated that the simplest patent lawsuit on a technological method can cost at a minimum $1 million. "So, when you get into something as complicated as genetic testing, you can imagine how quickly that dollar skyrockets."

MIT and E8 are asking the court to enter judgment that Navigenics has willfully infringed the '228 patent and that the damages therefore be three times the amount assessed, as well as "an ongoing royalty sufficient to compensate adequately for Navigenics’ ongoing infringement or … a permanent injunction prohibiting Navigenics from continued unlicensed infringement."

An attorney for the plaintiffs told Pharmacogenomics Reporter sister publication GenomeWeb Daily News that no monetary damages have been specified.

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