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Insight & Intelligence : Mar 15, 2012
Filings Postponed in Promega v. Life Tech as Parties Try to Settle
Last month a jury awarded Promega $52 million in damages related to firm’s short tandem repeat technology.
Lawyers for both sides in the Promega et. al. v. Life Technologies et. al. have agreed to postpone post-trial filings from today to next month. The companies are trying to settle their patent infringement case before filings are made, with discussions beginning today.
Life Technologies now has a little over two weeks, until April 2, to file post-trial arguments. Promega’s date for filing a response is April 19, and Life Tech’s reply deadline is April 30.
Life Tech's defense thus far has stated that:
“Life devoted resources in efforts that have now been determined by the Court to be outside the scope of the license and hence might incur damages, when Life could instead have devoted those resources to its core STR business of forensics and paternity,” Life Tech argued. “Once Promega initiated this suit, Life chose not to execute on marketing plans in the nonforensics and nonpaternity fields, despite investments in terms of market research and of resources in terms of employee time spent developing this plan.” Life Tech will still be able to sell STR kits for the forensics and paternity fields covered by the 2006 license.
Life Tech argued that Promega’s actions met the definition of “equitable estoppel,” the legal doctrine under which Promega would be barred from arguing infringement based on its own behavior. The firm also said that Promega acted unreasonably and inexcusably by delaying its lawsuit against Life Tech—“the defense of laches,” in legal terminology.
Promega sued Life Tech in May 2010, alleging that it infringed on five patents. Promega said it made the discovery while investigating claims that it owed more than $50 million in unpaid royalties, more than 20 times what it previously paid, under a 1996 license agreement with Research Genetics over one of the patents. Research Genetics later became Invitrogen, which merged with Applied Biosystems and changed its name to Life Tech. Promega also accused Life Tech of breaching its rights under the 1996 agreement, of engaging in “economic duress” against it, of breaching the 2006 agreement, and of unjust enrichment.
The patents protect technologies used in Life Tech’s AmpFISTR® COfiler®, AmpFISTR Profiler®, AmpFISTR Identifiler®, and AmpFISTR Green™ PCR amplification kits, according to Promega.
Promega’s STR technology is used in forensics and paternity testing as well as genetic research, cell line authentication, bone marrow transplantation monitoring, forensic training, and various types of cancer analysis. The 2006 license agreement gave Life Tech the right to make, use, sell, offer to sell, or import the STR kits in two fields: paternity determinations as well as to identify individuals; and use in or preparation for legal proceedings, including ongoing training of forensic laboratory employees and population studies undertaken to increase the accuracy of DNA matches.
“I have determined that some of the uses of the kits sold by defendants are not permitted under that license agreement because those uses are outside the particular fields,” Judge Crabb said. She noted uses including chimerism, classifying molar specimens, cell line authentication, determination of fetal sex, cancer analysis, genetic research, maternal cell contamination, sample tracking, and noncasework related forensic applications such as general research or teaching/training of people not employed in a forensics lab.
A jury ruled that Life Tech and co-defendants Invitrogen and Applied Biosystems generated more than $707.618 million in total sales between Aug 2006 and January 31 of this year. All those sales were made in the U.S. After calculating that the licensing agreement permitted $636.856 million in STR kit sales, the jury subtracted that number from the total sales to conclude that about $70.762 million in sales were impermissible. Of that figure, the jury concluded, $52.010 million constituted profit lost by Promega as a result of Life Tech’s sales.
“They’ve done a pretty good job, as near as I can figure, of tying up this fairly narrow area, but one that is clearly valuable,” Thomas Moga, a partner in the Intellectual Property section of Shook Hardy & Bacon, told GEN.
How valuable? “It’s absolutely one of our most important technologies. It makes up a significant minority of our sales and profits,” Promega general counsel Craig Christianson told the Wisconsin State Journal.
All the more reason why Promega went to the length it did to fight Life Tech in court. The $52 million judgment represents as much as 17% of the company’s 2011 annual revenue of over $300 million. It is also why Promega is in an enviable enough position that Life Tech, facing the possibility of more than $150 million in damages, opted wisely to settle the case.
Alex Philippidis is senior news editor at Genetic Engineering & Biotechnology News.
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