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Federal Court Rules Helicos Patent Invalid; Company Reaches Payment Agreement with Lenders

NEW YORK (GenomeWeb News) – A federal court has ruled in Illumina's favor in a lawsuit filed by Helicos BioSciences that had alleged patent infringement.

In a decision dated Aug. 28, District Judge Sue Robinson of the US District Court for the District of Delaware granted Illumina's motion for summary judgment declaring US Patent No 7,593,109 held by Helicos invalid for "lack of written description."

Titled "Apparatus and methods for analyzing samples," the patent relates to an apparatus, systems, and methods for biological sample analysis.

The '109 patent was the last of three patents that Helicos accused Illumina of infringing, following voluntary dismissal by Helicos earlier this year with prejudice of the other two patents. In October 2010 Helicos included Illumina and Life Technologies in a lawsuit that originally accused Pacific Biosciences of patent infringement.

Helicos dropped its lawsuit against Life Tech and settled with PacBio earlier this year, leaving Illumina as the sole defendant.

In seeking a motion for summary judgment, Illumina argued that the '109 patent does not disclose "a focusing light source operating with any one of the analytical light sources to focus said optical instrument on the sample." Illumina's expert witness further said that the patent "does not describe how focusing light source works" nor does it provide an illustration of such a system, according to court documents.

In handing down her decision, Robinson said, "In sum, and based on the record created by the parties, the court concludes that Illumina has demonstrated, by clear and convincing evidence, that the written description requirement has not been met."

In a statement, Illumina President and CEO Jay Flatley said he was pleased with the court's decision.

"The court's ruling on the '109 patent, and Helicos' voluntary dismissal of the other patents in the suit, vindicates our position that we do not infringe any valid Helicos patent," he said. "While we respect valid and enforceable intellectual property rights of others, Illumina will continue to vigorously defend against unfounded claims of infringement."

After the close of the market Wednesday, Helicos also disclosed that it had reached an agreement with lenders to waive defaults arising from Helicos' failure to pay certain risk premium payments in connection with prior liquidity transactions. The transactions are part of risk premium payment agreement Helicos entered into with funds affiliated with Atlas Venture and Flagship Ventures in November 2010.

The lenders have agreed to defer the risk premium payments "until [10] business days after receipt of a written notice from the lenders demanding the payment of such risk premium payments," Helicos said in a document filed with the US Securities and Exchange Commission.

The Cambridge, Mass.-based firm also disclosed that Noubar Afeyan and Peter Barrett have resigned from its board.

Helicos said two weeks ago that its second-quarter revenues dipped 29 percent year over year to $577,000. In an SEC document, it also warned that existing funds were not sufficient to support its operations and related litigation expenses through the planned September trial date for its dispute with Illumina.

In Thursday trade on the OTC market, shares of Helicos closed down 20 percent at $.04.