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Helicos Patent Infringement Lawsuit Winds its Way through Courts as Cash Position Dwindles


By Julia Karow

Helicos Biosciences' patent infringement lawsuit against Pacific Biosciences, Illumina, and Life Technologies is proceeding through the courts as the company continues to wind down its operations.

In a recently filed 10-K document with the US Securities and Exchange Commission, Helicos said that it has granted an outside intellectual property litigation counsel a priority security interest in the patent suit. Under the terms of the agreement, Helicos will pay the counsel up to 40 percent of the proceeds it might receive in connection with the resolution of the litigation. To date, Helicos and its lawyers, who are working on a contingency basis, have "expended significant resources" on the litigation and "are expected to continue to do so going forward," the company said.

Even if successful, Helicos cautioned, none of the proceeds may go to common stockholders "as a result of various arrangements in place with professional service providers, bridge lenders, licensors, and others."

In the same SEC filing, the company disclosed that it had $34,000 in cash and cash equivalents as of March 23 — a sharp decline from $200,000 it reported in a March 9 filing. The firm warned that "there can be no assurance that we will be able to generate the funding necessary to continue our intellectual property monetization strategy," and noted that if it is unable to obtain additional financing, "we will be forced to cease operations and/or seek bankruptcy protection."

Helicos first filed its suit against PacBio in August 2010 claiming that the company infringes on four of its patents, US Patent Nos. 7,645,596 and 7,037,687, both entitled "Method of determining the nucleotide sequence of oligonucleotides and DNA molecules"; US Patent No. 7,169,560, entitled "Short cycle methods for sequencing polynucleotides"; and US Patent No. 7,767,400, entitled "Paired-end reads in sequencing by synthesis."

Later, Helicos added Life Tech and Illumina as defendants, claiming that Life Tech infringes on the '596, '687, and '560 patents and Illumina on the '687 and '560 patents. It also alleged that Illumina infringes on an additional patent, US Patent No. 7,593,109, entitled "Apparatus and methods for analyzing samples."

The four patents in the original complaint describe methods for sequencing-by-synthesis, while the '109 patent describes a system for analyzing biological samples using a flow cell.

All three defendants countersued Helicos later in 2010, seeking a declaratory judgment of noninfringement and invalidity of the patents.

In parallel, PacBio asked the US Patent and Trademark Office in January 2011 to reexamine the '596, '687, '560, and '400 patents. The USPTO granted the inter partes reexaminations in the spring for all four patents, rejecting all their claims in non-final actions. In response, Helicos amended two independent claims for the '400 patent last summer and added three new claims to the reexamination.

During the fall, the USPTO issued an Action Closing Prosecution for three of the patents, maintaining its rejection of all of their claims. It issued a similar ACP in January of this year for the '400 patent (IS 3/20/2012).

All four reexaminations remain pending.

In December of 2011, Helicos added Arizona Science and Technology Enterprises, or AZTE, as a plaintiff to its suit. AZTE licensed the '596 and '687 patents to Helicos. AZTE is the exclusive licensee of the patents from the Arizona Board of Regents, on whose behalf it licenses the patents to third parties.

Also in December, the court denied a PacBio motion to stay the litigation pending the outcome of the reexamination of Helicos' four patents.

The court that month also denied a motion Life Tech filed in June to drop it from the litigation or to stay the claims against it because it is not commercializing its single-molecule real-time Quantum dot nanocrystal "Starlight" sequencing technology, which Helicos says would infringe its patents.

According to the court, Life Tech said that it suspended its commercialization efforts for the Starlight technology in February 2011 and has no plans to commercialize it in the future.

Also in December, the defendants requested to move the suit from the US District Court for the District of Delaware to the Northern District of California, arguing that this would be the "most convenient" location. The court held an "evidentiary hearing" on the venue transfer on Feb. 16, 2012, but no court records on the outcome of that hearing are currently available, and the court has yet to rule on the proposed change of venue.

Also in February, the court ordered a revised schedule for the litigation. Among other deadlines, the parties need to file a joint claim construction statement and claim chart by May 2. A hearing on motions for summary judgment and claim construction is scheduled for June 29. The schedule does not mention a trial date, which was previously set for Sept. 10, 2012.

The court also agreed in February to a stipulation by Helicos and Illumina to dismiss their mutual claims about the '560 patent.

Further, the court canceled previously scheduled mediation conferences between Helicos and Illumina and Life Tech and scheduled a conference with the magistrate judge for Feb. 16, following the evidentiary hearing, though no court documents about that conference are available.

The parties also held a teleconference on March 1 to discuss "a discovery matter" but the outcome of that conference is also not available from the courts. The court ordered that the transcript of the discussions and rulings during the teleconference "shall serve as the Order of the Court in this matter."

In late March, the court canceled a mediation conference between Helicos and PacBio before a US magistrate judge that was originally scheduled for April 4.

Have topics you'd like to see covered in In Sequence? Contact the editor at jkarow [at] genomeweb [.] com.

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