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Will Qiagen Acquisition of IBS Impact Patent Dispute with Illumina?

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Late last month, Qiagen announced that it was moving into the next-generation sequencing market, with a specific focus on clinical sequencing workflows. As part of that strategy, it acquired Intelligent Bio-Systems and said that it planned to improve IBS's existing sequencing platform, the Mini-20, to make it more suitable for commercial, clinical purposes (IS 6/26/2012).

Intelligent Bio-Systems had licensed technology, developed by Jingyue Ju, from Columbia University. The university is in the midst of a lawsuit against Illumina, claiming the company infringes on patents it holds related to sequencing-by-synthesis chemistry.

According to Qiagen's director of public relations Thomas Theuringer, through its acquisition of IBS, Qiagen now has exclusive rights to the Columbia patents.

"We support Columbia's litigation against Illumina, and are also entitled to royalties if we prevail," he told In Sequence via e-mail. He declined to comment further because the litigation is ongoing.

Illumina declined to comment, saying that it does not comment on pending legal matters.

The patents in dispute are US Nos. 7,635,578; 7,713,698; 7,790,869; 7,883,869; and 8,088,575.

Columbia brought its suit against Illumina in March. In documents filed with the US District Court for the District of Delaware, Columbia claims that Illumina's instruments — including the Genome Analyzer, HiSeq 2000/1000, HiSeq 2500/1500, MiSeq, and the HiScanSQ — kits and reagents, and sequencing services infringe on the patents, and that Illumina became aware that it was infringing in 2009 yet continued to commercialize products that infringed on the patents.

In June, Illumina filed a counterclaim, stating that while it became aware of Columbia's patents in 2009, it has not infringed on "any valid, enforceable claim" of the patents in question.

In its counterclaim, it asks the court to dismiss the complaint, to find that the claims of the patents are invalid, to find that Illumina does not infringe, and to order Columbia University/Intelligent Bio-Systems to reimburse Illumina for its attorneys' fees, any costs incurred, and further relief as the court deems reasonable.

Whether Qiagen's acquisition of IBS will impact the status of the suits is unclear. Vamil Divan, an analyst at Credit Suisse, which covers both Illumina and Qiagen, said that the impact would likely not be huge, but could serve to drag the suit out longer.

"I don't think [the acquisition] necessarily changes anything," he said. "With Qiagen's resources, they might be able to extend it out longer and fight it a little longer."

Additionally, he did not think that Illumina would be more likely to settle. "Maybe if they were up against a more formidable competitor," like Pfizer or Thermo Fisher, he said.

The suit is also not likely to have a dramatic impact on Illumina's ability to sell products, he said. If so, "they would fight it tooth and nail."

Even if Columbia does prevail, he said that the most likely result would be that Illumina would have to pay royalties to Qiagen. However, any potential royalty is still likely "many years away."

As such, he did not think that IBS's patents played a role in Qiagen's decision to acquire it; however he said the choice of IBS was a strange one for Qiagen to make.

Divan said that there are currently four private companies in the next-gen sequencing space that are talked about as potential targets for acquisition, including Oxford Nanopore Technologies, Genia, GnuBio, and Nabsys.

Divan speculated that these other companies were either too expensive or not for sale. Additionally, Life Technologies has a significant investment in Genia, which may have posed problems for an acquisition, he said.

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