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IP Watch: Affymetrix and Illumina Strike a Deal

Genetic microarray manufacturers Affymetrix Inc. (Santa Clara, CA) and Illumina Inc. (San Diego) have entered into an agreement to resolve patent litigation between the two companies. Under the terms of the settlement, Illumina agreed—without admitting liability—to make a one-time payment to Affymetrix of $90 million. Payment of the settlement amount will be made once the companies' litigation has been formally dismissed by the courts.

As part of the agreement, Affymetrix agreed to dismiss all lawsuits it had brought against Illumina. In return, Illumina agreed to dismiss its counterclaims in the relevant lawsuits. In exchange for the payment, Affymetrix granted Illumina, its affiliates, and its customers a perpetual covenant not to sue for making, using, or selling any of Illumina's current products, evolutions of those products, and related services. In addition, Affymetrix extended the covenant not to sue for four years for making, using, or selling Illumina products or services that are based on future technology developments.

The covenant not to sue covers all fields other than photolithography, the process by which Affymetrix manufactures its arrays. Illumina does not operate in the field of photolithography.

The companies report that the settlement will resolve all litigation and payments resulting from lawsuits that Affymetrix filed against Illumina in the United States, Germany, and the United Kingdom.

Affymetrix filed its most recent batch of multinational lawsuits against Illumina in October 2007. The latest suits targeted technology offered by Solexa, a company acquired by Illumina in January 2007, as well as all of Illumina's BeadArray products.

Affymetrix had previously sued Illumina for patent infringement in 2004. In March 2007, the jury returned a verdict in favor of Affymetrix. The jury found that Illumina's arrays, assays, scanners, software, and related products infringed on one or more claims of all five of Affymetrix's patents cited in the suit. The jury imposed a royalty of 15%, and awarded total damages of more than $16.7 million for the period between 2002 and 2005. Had the case proceeded, Affymetrix expected the final judgment to include additional damages through the date of the final judgment.

Court Upholds Cordis Patent Victory

Earlier this month, the Court of Appeals for the Federal Circuit upheld two separate 2005 jury verdicts that found Medtronic Inc. (Minneapolis) and Boston Scientific Corp. (Natick, MA) infringed coronary stent patents owned by Cordis Corp. (Miami Lakes, FL), a Johnson & Johnson company. Cordis reports that it now intends to ask the U.S. District Court in Delaware to reinstate its damage judgments of $271 million against Medtronic and $324 million against Boston Scientific, plus interest.

"We are very pleased that the Court of Appeals has recognized the validity of the prior verdicts," said Todd Pope, worldwide president for Cordis. "We will urge the U.S. District Court to move expeditiously to reinstate the two previous damages judgments, along with the interest that has accrued during the appeals process."

Cordis reports that injunctive relief is not an issue in the current proceedings because the Medtronic and Boston Scientific stents at issue are no longer on the market. In March 2005, separate juries found that Medtronic's GFX and Microstent II infringed Cordis's Palmaz and Schatz patents, and that Boston Scientific's Nir stent infringed the Palmaz patent. The Palmaz and Schatz patents relate to the fundamental design of the first coronary stent developed and introduced by Cordis.

Both patent infringement cases were originally tried in 2000, with Cordis receiving favorable jury verdicts. After a series of rulings and appeals, both cases were retried in March 2005, with Cordis prevailing again.

Synergetics Settles Trade Secrets Lawsuit

On January 15, microsurgical instrument manufacturer Synergetics USA Inc. (O'Fallon, MO) announced that it had reached a settlement agreement with Charles Hurst and Michael McGowan and their company, Innovatech Surgical Inc. (Camden, NJ).

In 2004, Synergetics sued Hurst and McGowan for misappropriation of trade secrets, breach of contract, breach of fiduciary duty, and intentional interference with business relationships. In December 2005, a judgment of about $2.4 million was entered in favor of Synergetics, and an injunction was issued against Hurst and McGowan's use or disclosure of the company's trade secrets. In February 2007, the judgment was affirmed in all respects. In August 2007, the court dismissed the defendants' motion to vacate the judgment; however, sanctions were issued against Synergetics in the amount of about $1.2 million. Hurst and McGowan further appealed the denial of their motion to vacate, and Synergetics cross-appealed the sanction.

Under the settlement, the parties have agreed to dismiss pending appeals, as well as a separate lawsuit filed in 2006 in which Synergetics alleged patent infringement against three defendants, including Innovatech Inc. The underlying judgment as modified in August 2007 remains in full force and effect. However, the parties will each file a notice of satisfaction with respect to all monetary obligations.

"The settlement makes good business sense, as we have been unable to meaningfully collect on the judgment," said Gregg D. Scheller, president and CEO of Synergetics USA. "As we will continue to have the benefits of the injunction against Hurst and McGowan, we feel we have defended our trade secrets from those who would misappropriate them."

Judge Dismisses Claim against SurModics

A federal judge has dismissed a claim of tortious interference with prospective economic advantage against SurModics Inc. (Eden Prairie, MN), a provider of surface modification and drug delivery technologies to the healthcare industry.

The claim, levied by vitreoretinal surgeon Michael J. Cooney, MD, involved a patent directed to technology embodied in SurModics' I-vation, the company's lead product in the field of ophthalmic drug delivery. According to law firm McAndrews, Held & Malloy (Chicago), Johns Hopkins University is the owner of the patent, which was licensed to InnoRx Inc., a company later acquired by SurModics. Cooney claims to be cofounder of InnoRx and coinventor of the I-Vation technology.

Judge William H. Steele of the U.S. District Court for the Southern District of Alabama, Southern Division, dismissed the claim because Cooney had failed to state a claim upon which relief could be granted, and because the claim did not comply with state law pleading requirements for such claims. Cooney's complaint also alleged that he should have been named as an inventor on the Johns Hopkins patent, as well as on more than a dozen other pending patent applications.

Judge Steele agreed with SurModics that the list of 15 other pending patent applications named in Cooney's complaint should not be part of the present litigation. Judge Steele said that he had no jurisdiction to determine the correct inventorship of the pending patent applications and stated that ownership of the pending applications was an issue to be considered by the U.S. Patent and Trademark Office, not his court or a federal jury.

SurModics was represented in the case by McAndrews shareholders Timothy J. Malloy and Stephen F. Sherry, and McAndrews attorney Jonathan M. Rushman.

Industry IP in Brief

In addition to the above intellectual property developments, the following medtech IP news was announced this month.

  • On January 11, SenoRx Inc. (Aliso Viejo, CA) reported that Hologic Inc. (Bedford, MA) and its wholly owned subsidiary, Cytyc Corp., had filed a lawsuit against SenoRx in the U.S. District Court for the Northern District of California. The complaint, which alleges patent infringement of certain Hologic brachytherapy patent claims, seeks unspecified monetary damages and an injunction. In response, SenoRx announced that it is confident in its intellectual property and intends to vigorously defend itself.
  • CryoCor Inc. (San Diego) has filed two patent infringement lawsuits against CryoCath Technologies Inc. (Montreal), one in the U.S. District Court for the District of Delaware and one in Canada. The lawsuits allege that CryoCath's products infringe several patents related to CryoCor's cardiac cryoablation system. In response, CryoCath stated that it believes the claims to be without merit and that the proceedings initiated by CryoCor are in response to a patent infringement lawsuit filed by CryoCath against CryoCor in October 2007.
  • Qiagen Gaithersburg Inc. (formerly Digene Corp.; Gaithersburg, MD), a wholly owned subsidiary of Qiagen NV (Venlo, The Netherlands), announced that it was granted summary judgment on the antitrust counterclaims asserted against it in its suit against Third Wave Technologies Inc. (Madison, WI). Qiagen reports that it intends to continue to pursue its pending patent litigation, in which the company alleges that Third Wave is infringing on Qiagen intellectual property.
  • On January 17, AngioDynamics (Queensbury, NY) announced that U.S. District Court Judge Nathaniel M. Gorton denied a motion filed by Diomed Holdings Inc. (Andover, MA) in July 2007. The motion alleged that AngioDynamics violated a permanent injunction that prohibited AngioDynamics from selling disposable kits that were found to infringe at trial and from selling laser consoles for use with those kits. Meanwhile, AngioDynamics has appealed the outcome of the patent infringement litigation with the U.S. Court of Appeals for the Federal Circuit. The company expects oral arguments to be presented to a three-judge panel in March or April 2008.
  • Zoll Medical Corp. (Chelmsford, MA), a manufacturer of resuscitation devices and related software solutions, has entered into a technology licensing agreement with Laerdal Medical AS (Stavanger, Norway) and its U.S. subsidiary, Laerdal Medical Corp. Under the agreement, Zoll is licensing to Laerdal nonexclusive worldwide rights to patents covering feedback in connection with cardiopulmonary resuscitation (CPR). Laerdal is granting to Zoll options to license similar rights under patents owned by Laerdal. In addition to the technology agreements, Zoll and Laerdal have also agreed to cooperate in activities to further the development of the overall market for CPR feedback technology, including activities such as funding of clinical studies, work to promote healthcare industry standards, and educational activities aimed at fostering CPR quality improvement.

    © 2008 Canon Communications LLC

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