GTG suing Applera, Covance over patent infringement

Melbourne based Genetic Technologies (ASX:GTG) is taking on three of the big guns in the biotechnology industry.

Earlier this year, the company noted in a market announcement that two lawsuits had been filed against three major US companies who had each been on notice for infringement of the company's controversial non-coding DNA patents for around a year.

One of the lawsuits is against Applera Corporation, the parent company of Applied Biosystems and Celera Genomics Group. The lawsuit particularly applies to diagnostic cystic fibrosis mutation detection tests developed by Celera Diagnostics, a joint venture between Applied Biosystems and Celera Genomics.

The other lawsuit has been filed against contract research organisation Covance, as well as Variagenics, which last year merged with Hyseq to form Nuvelo. Again, the lawsuit applies to a number of diagnostic tests developed by the two companies.

In each case, US patent 5,621,179, 'Intron Sequence Analysis Method for Detection of Adjacent and Remote Locus Alleles as Haplotypes', is the subject of the complaint. The patent was first filed in the US in 1992, and granted on March 18, 1997. According to the complaint filed by GTG, the company is seeking damages as well as legal fees. Under the US legal system, a company found to have wilfully infringed on another's patents may be liable for treble damages.

Both lawsuits were filed on March 26th 2003 in San Francisco by GTG's lawyers, and subsequently moved to the US District Court, where they are still in the early part of the legal process.

GTG executive chairman Dr Mervyn Jacobson said it would not be appropriate to make any comments while the legal proceedings were in the hands of the court.

Interestingly, one of GTG's licensees, Myriad Genetics, started legal proceedings against GTG prior to agreeing to pay US$1 million plus for licenses to the company's key non-coding DNA analysis patents. The basis of the lawsuit was the invalidity -- and thus non-infringement -- of GTG's patents, but the claim was withdrawn without prejudice before the case ever got to the courtroom.

Jacobson said that the lawsuit was a ploy by Myriad during the negotiation of the licence, giving Myriad a tactical advantage if discussions led to the courts. Essentially, he said, Myriad was covering itself in case there was a breakdown in the negotiations.

To date, no court decisions on matters arising from the GTG patents have been issued in the US.