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ABI Takes IP-Ownership Suit Against Ex-Counsel, Illumina to Federal Court

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Applied Biosystems late last month opened a second flank in its patent dispute with its former chief patent counsel, Illumina, and Solexa over ownership of a number of patents relating to sequencing-by-ligation.
 
The matter of the new suit, filed in a federal court in California, is similar to the company’s original suit, filed in a California state court at the end of last year. In that suit, ABI claimed that its chief patent counsel had filed a patent application in 1995, but instead of assigning it to ABI, he bestowed it on ABI spinoff Lynx Therapeutics, his new employer, which later acquired Solexa (see In Sequence 1/9/2007).
 
The three patents that the application yielded — Nos. 5,750,341; 5,969,119; and 6,306,597, all entitled “DNA sequencing by parallel oligonucleotide extensions” — cover sequencing-by-ligation, the approach used by ABI’s SOLiD next-generation sequencer, which the company is currently shipping to early-access users.
 
ABI filed its federal case May 31 against its former employee and chief patent counsel Stephen Macevicz together with Illumina and Solexa in the US District Court for the Northern District of California’s San Jose division.
 
The company is seeking a declaratory judgment that “no Applied Biosystems action infringes these patents, and in that act, they belong to Applied Biosystems,” an ABI spokesman told In Sequence this week. “That’s what we are trying to achieve.”
 
In a written response to In Sequence, an Illumina spokeswoman reiterated this week that Illumina’s Genome Analyzer system uses a different technology, sequencing-by-synthesis, that is not covered by any of the patents at issue in the two actions.
 
The state and federal complaints are identical in large parts, but the new suit asks for a jury trial and adds Illumina, which acquired Solexa earlier this year, as a defendant. Also, ABI added a section entitled “Grounds for Declaratory Relief” in the federal suit that was not part of the state complaint.
 
This section, which seeks to show that Illumina claims ABI is infringing its patents, says that in March 2006, Tony Smith, then vice president and chief scientific officer of Solexa, wrote a letter to Kevin McKernan, then vice president and co-CSO of Agencourt Personal Genomics, attaching a copy of the ‘597 patent, and referring to a conversation between the two at a meeting at Hilton Head, SC. Two months later, ABI announced it would acquire APG. It closed the acquisition in July.
 
With the letter, Solexa “put Agencourt on notice of the ‘597 patent, as well as the related ‘341 and ‘119 patents, thereby indicating to Agencourt/AB that Solexa is contending that Agencourt is engaging or intending to engage in activity for which it needs a license to the ‘597 patent and its related patents,” ABI claims in the complaint.
 
The section also refers to a discovery request Solexa made in February 2007 in the related state action in which it asked for all documents that refer or relate to whether ABI infringes the three patents. “This discovery demand confirmed Illumina’s intent to assert the ‘341, ‘119, and ‘597 patents against AB,” ABI claims. In Sequence was unable to obtain a complete copy of Solexa’s discovery request from the state court before deadline.
 
ABI now “seeks a declaration of its rights to continue making, selling, offering for sale, and using DNA sequencing products without a license and without a risk of being sued for infringement of the patents,” according to the section in the complaint.
 
Also, “in the interests of judicial economy, AB herein alleges its causes of action regarding the ownership of the patents, so that the issues of ownership and infringement can be resolved in the most efficient manner through a consolidated proceeding,” the complaint reads. “Since the parties’ positions regarding infringement will be affected by the determination of ownership, the same Court should resolve all issues concerning the patents, beginning with the issue of ownership.”
 

“We are seeking a declaratory judgment that no Applied Biosystems activity infringes these patents, and in that act, they belong to Applied Biosystems.”

As of May 31, the state court “has not issued a decision regarding the ownership of the patents, and the case is at the beginning of discovery,” ABI’s recent suit states elsewhere. Last week, the company filed a notice with the federal court that said “the parties are in discussions regarding whether consolidation of the action is appropriate.”
 
In both lawsuits, ABI claims that Macevicz, while working as ABI’s chief patent counsel, filed a patent application in April 1995 and failed to assign it to the company, which ABI said he was required to do under the terms of an invention agreement.
 
ABI claims that Macevicz went on to assign the application and the three patents it yielded to Lynx Therapeutics, which ABI spun off in 1992. Macevicz joined Lynx in September 1995 as vice president of intellectual property, according to a filing with the US Securities and Exchange Commission.
 
Lynx acquired Solexa in 2005 and operated under the name Solexa until the company was acquired by Illumina this year.
 
ABI said in its recent suit it was unaware of the patents and application, and their assignment to Lynx, until around February 2006.
 
The patents in dispute were granted in 1998, 1999, and 2001, respectively. Macevicz is listed as the sole inventor on all three of the patents, which are all assigned to Lynx Therapeutics.
 
As in the earlier suit, ABI seeks, among other things, damages from Illumina “in an amount to be proven at trial;” punitive damages from Illumina; and injunctive relief, which includes “all necessary steps to restore ownership of the patents [to ABI], including patents that may still be pending or may yet issue based on the application.”
 
The same day that ABI filed the federal suit, the court issued an order setting an initial case management conference for Sept. 6.

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