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In New Suit, Affy Alleges Pacific Biosciences Conspiracy to Recruit Employees, Gain Trade Secrets


By Justin Petrone

Affymetrix has sued Pacific Biosciences for hiring away its employees, accusing the sequencing newcomer of inducing Affy personnel to join PacBio in order to gain an "unfair economic advantage."

In the new suit, filed last week in the Superior Court of the State of California, County of Santa Clara, Affy alleges that PacBio solicited its employees in order to access confidential information and to "engage in interference with Affymetrix's contractual relationships and prospective economic advantage."

Affy is seeking compensatory and consequential damages against PacBio, including a "sum sufficient to punish and make an example" of the Menlo Park, Calif.-based sequencing company. Affy is also seeking permanent injunctive relief to prevent the defendants from soliciting Affy for new employees, and to stop "using, disclosing, or otherwise transferring [its] confidential information" to PacBio.

Founded in 1990, Affy is the alma mater of many in the genomics industry, a fact that has played a role in other lawsuits involving the company. For instance, several legal disputes between Affy and Illumina in the last decade have concerned Affy IP generated by scientists who later moved to similar positions at Illumina (BAN 11/10/2009).

This is the first time, though, that Affy has sued a company for luring away its employees. In the suit filed last week, Affy alleged that since August 2009 at least 15 of its employees have left the company to work at PacBio. According to Affy, the PacBio recruits worked in "key functions" at Affy "essential to its business in the sales, field applications, and technical service departments."

The company did not name any of the employees in its lawsuit, saying it does not know their "true names, identities, and capacities." It said it will amend its complaint to include the defendants' true names "when the relevant facts become known."

Of PacBio's 10-member executive leadership team listed on its website, only two are Affy alumni. One, Martha Trela, PacBio's vice president of marketing, previously was vice president of commercial marketing at Affymetrix, where she "built and led the commercial marketing department, which included strategic marketing, competitive intelligence, marketing programs and regional marketing," according to PacBio. The other, Pat Brooks, PacBio's vice president of North American sales, used to be vice president of sales at Affy. It is unclear if Trela or Brooks are among the former Affy employees referred to in the lawsuit.

According to the suit, Affy's employees were provided with "possession of and access to valuable confidential business information," concerning "business methods, procedures, pricing and marketing strategy, client information … bonus structures and stock incentives." As a condition of employment, Affy employees signed a confidentiality and invention agreement to keep confidential "all proprietary information of Affymetrix."

Affy said in the suit that its former employees, working with PacBio personnel, have violated this agreement. The array maker said that it has demanded that PacBio "cease and desist its unlawful and unfair competition and conspiratorial behavior" and acknowledge that the behavior would stop.

In a letter dated Sept. 23, 2010, attached to the complaint, Affy cited its "grave concern" about "what appears to be an aggressive and potentially unlawful pattern" of PacBio's hiring of former Affy employees. In the letter, authored by Affy attorney Wendy Lazerson and addressed to PacBio General Counsel Matthew Murphy, Affy alleged that PacBio had hired in the previous six months "at least 10" Affy employees.

In the letter, Affy requested that PacBio "confirm in writing" that it would stop soliciting its employees and that it does not have Affy's confidential information. The firm's attorney wrote that it would "prefer to resolve this matter informally," and expected a response within five business days.

Representatives from both Affy and PacBio declined to comment on the case.

Have topics you'd like to see covered in BioArray News? Contact the editor at jpetrone [at] genomeweb [dot] com

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